Employment statistics better than expected

Employment rose by 6,000 in the 3 months to September, however there was a 71,000 increase in those out of work for over a year - analysis of the latest stats.

The latest unemployment stats out today show that employment rose by 6,000 in the three months to September – the first quarterly rise since last summer. The rise in International Labour Orrganisation-defined unemployment of 30,000 is also the smallest quarterly rise since May 2008.

Thankfully my extrapolation of a monthly increase based on October’s stats in my last post (which the stat geeks at ONS and my old colleagues at DWP would have frowned at!) continues to be a trend. So far at least. Digging into the month on month figures reveals that unemployment actually fell by 7,000 between August and September. So could we see the first official fall in UK unemployment since the start of the recession in the December stats?

Considering the economy has shrunk by almost six per cent, these unemployment figures are encouraging. The numbers claiming JSA only rose by 12,000 last month and there is now a good chance that the claimant count will peak well below two million (assuming the economy doesn’t ‘double dip’).

The ONS have some interesting analysis comparing recent recessions, showing that in the early 1980’s unemployment started higher and rose faster, despite that downturn being shallower than today’s. However, there are still millions of families suffering from the human, economic and social consequences of unemployment – and any labour market recovery remains precarious at best. For example, the number of workforce jobs fell by 163,000 in the last quarter (though data on redundancies and vacancies are more positive).

The million-dollar question is why do the unemployment figures appear to be so much less bad than we might expect? The truth is it’s impossible to say for sure. But some of it certainly appears to be linked to the UK’s more flexible labour market (and effective active labour market) policies. For example, there is evidence of significant adjustments in hours and wages. Today’s figures show that the number of people in full-time employment fell by 80,000 while the number in part time employment rose by 86,000.

Incidentally, the gender split of these trends is further evidence that this recession has actually hit the employment of men harder than that of women. Also, earnings growth in the year to September was 1.8 per cent, the lowest rate since the comparable data series began in 2001.

However, there is one massive caveat to the encouraging picture in today’s figures. While the number of people unemployed for under six months fell by 100,000 last quarter, it is much more worrying that there was a 71,000 increase in those out of work for over a year. – these are the people hit hardest by the recession who will face the greatest disadvantages in getting back into work when the recovery beds in.

This is the group the government must prioritise in its fight against unemployment.

The Future Jobs Fund is already proving a success, generating 95,000 jobs for young people who’ve been on JSA for a year. Ministers should use the Pre-Budget Report to extend access to these jobs beyond just the under 25’s, on the way to guaranteeing work to anyone at risk of long term unemployment. This would be a clear demonstration of Labour’s commitment to protecting people from the worst consequences of the recession – and ensuring everyone can have the dignity and purpose of work.

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13 Responses to “Employment statistics better than expected”

  1. [email protected]

    I think it’s fair to say the jury is still out on where unemployment will go next (figures released by the CIPD today suggest that employment intentions are still in negative balance). It’s good news that the rate of deterioration has slowed, but we’re still going in the wrong direction. And, as you point out, the increase in long-term unemployed is worrying.

    There’s a real danger that we’re moving to a highly polarised recession. Mobile, well-educated, highly trained and relatively cash-rich workers seem to be returning to work (and to normal) quickly following the shock to the financial system. They’re benefitting from increased globalisation (and a weak pound) and flexible labour market practices.

    By contrast, low earners – those who were getting by without state assistance prior to the recession, but only just – are proving much less resilient. Firms are much less likely to offer the same flexibility to them that they provide for their higher skilled employees (because they’re not as difficult or expensive to replace when the growth returns), and they’re also much less likely to qualify for healthy redundancy payments to help them weather the storm and consider their options. For this group, the recession is looking a lot more like a traditional slog, and the worst may still be to come once the various time-limited recession policies put in place by the government come to an end.

    And of course, we’re yet to experience public sector job cuts…

  2. Anon E Mouse

    Here we go again – just heard PMQ’s.

    Brown is going to deny youth unemployment is what it is. (Like 10p Tax and Boom and Bust and Tory Cuts – you know the types of things)

    Cameron is going to keep asking does he agree that blah blah.

    Brown claims black is white blah blah.

    Cameron ditto.

    Every media interviewer will start asking the same question to anybody in the Labour Party.

    Is Youth Unemployment 19.8% or not? Labour MP’s wince and eventually stop doing interviews.

    Three weeks from now Mandelson wriggles in the media (Gordon is still banging on about the big bad Tories blah blah) and then Brown climbs down admitting black is black and then claims he never said what the horrible biased media said about him.

    As a partial observer (As a lifelong Labour voter I REALLY detest this government) why doesn’t someone stop this cycle?

    If Labour think it’s bad now wait until a General Election. If Brown the Clown is still PM we are doomed.

  3. CVRepublic

    Employment statistics better than expected | Left Foot Forward http://url4.eu/jfCJ

  4. CVRepublic

    Employment statistics better than expected (Left Foot Forward) http://url4.eu/jfFc

  5. Denise Andrew

    Employment statistics better than expected | Left Foot Forward: The ONS have some interesting analysis comparin.. http://bit.ly/3czPr3

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