Along with the decline in economic activity, the unemployment rate in the Baltics has also risen significantly in the second quarter, but the rise so fa has r been smaller than expected. In Latvia and Lithuania, the unemployment rate in the second quarter reached 8.6% from about 6% at the end of 2019, while in Estonia the unemployment rate increased from 4.1% at the end of the previous year to 7.1%. This is a significant increase, but economic activity has rebounded significantly since April, and a substantial further rise in unemployment seems unlikely. Since mid-July, the registered unemployment rate in Latvia has decreased from 8.6% to 8.1%, even despite the termination of the benefits for furloughed workers. The COVID-19 crisis has also hit the tourism, leisure and other service sectors hardest in the labour market. The activity of these sectors is still partially restricted. Meanwhile, in other sectors, entrepreneurs' employment expectations are improving, but they are still negative. Therefore, it will take time to return to previous levels of unemployment. This, together with significantly slower wage growth, has reduced household incomes, and these changes will be reflected in consumption dynamics in the coming months.