Richard Exell delves behind the headline unemployment figures and takes a deeper look at the latest September 2012 labour market statistics.
The most important figures in today’s labour market statistics (pdf) are very positive: in May to July employment was 236,000 higher than it was in Feb-Apr and unemployment was 7,000. These are improvements and although some of the other figures suggest reasons to worry we should still remember that an increase in employment is better than a fall and lower unemployment is good news.
Today’s figures buttress the results in this week’s Report on Jobs from the Recruitment and Employment Confederation. The REC found that, although recruitment agencies still report a decline in permanent placements, the rate of decline is slowing down and there was an increase in temporary placements for the first time in nine months.
But there are reasons to be cautious; for one thing, just 61 per cent of the increase in employment is due to more employees. That somewhat startling figure comes about because 22 per cent of the increase is due to rising self-employment and another 17 per cent is the result of an increase in the numbers on government schemes or in unpaid jobs working for family businesses.
And 57 per cent of the increase is in part-time jobs, so full-time employee jobs only account for less than a quarter of this increase, as the chart below shows:
If we look at the change over the past 12 months the picture is even more disturbing. Part-time work accounts for 74 per cent of the increase and self-employment for 59 per cent – the number of full-time employee jobs actually fell 15 per cent, from 18,393,000 to 8,328,000.
Under-employment continues to be a worry – in the last quarter the number of people in temporary jobs who would have preferred full-time employment rose by 50,000 and the number in involuntary part-time work by 24,000. There are now 2,082,000 people under-employed on this measure.
The improvement has not been shared evenly – London and the North West have seen large increases in employment and significant falls in unemployment, but other regions have not done as well, as the table below shows:
Youth unemployment rose again – up 7,000 on the quarter – and once again stands at more than one million (1,017,000). Long-term unemployment increased too, with number unemployed over 12 months rising 22,000 to 904,000.
The figures for public sector employment came out today as well. They are complicated by the re-classification of further education colleges as private sector, but other public sector education employment fell by 8,000 in the last quarter – and NHS employment was 7,000 lower too.
Finally, there’s obvious bad news for workers in the average weekly earnings statistics – the yearly rate of increase for average weekly earnings fell from 1.8 per cent in June to 1.5 per cent in July. With the Retail Price Index at 3.2 per cent, real earnings are falling at the same rate as we’re used to seeing them rise.
Taken altogether, today’s figures show that unemployment is down, but the increase in employment has had a massive cost in terms of the quality of jobs.