Today's unemployment figures show the labour market rebounding more quickly than in the past. But 2.5 million people in unemployment is no excuse for triumphalism.
As outlined earlier, today’s unemployment figures show the labour market is rebounding more quickly than in previous recessions when over 3 million people were unemployed for months on end. But close to 2.5 million people remain in unemployment and there is not yet room for triumphalism.
On the plus side, it is remarkable that unemployment has fallen despite the UK still officially being in recession and encouraging that the Job Seekers’ Allowance count went down for the second month running – this despite predictions that it would rise. Extrapolating out the data – using the methodology employed by Graeme Cooke on this blog – reveals that between October and November ILO unemployment actually fell by 33,000.
It is also good news that both measures of youth unemployment went down – even given the rise in student numbers, which has driven part of the rise in the youth ILO rate. The Labour party have a good graphic outlining how employment is higher in ever region of the country compared to the early-1990s recession.
Although there is a headline rise in inactivity of 79,000, this includes an 81,000 rise in students so actually a net fall. Similarly the stability in inactive benefits is a great boon. As this DWP report outlines:
“In contrast to previous experience, the current recession has so far seen no significant rise in the number of people claiming lone parent or incapacity benefits. Between 1990 and 1991 alone, the numbers on these benefits rose by over 200,000 and by 1995 the number was a million higher than five years earlier.” (para 39)
But there is also some bad news too: employment fell by 14,000 indicating that the labour market is shrinking overall. Meanwhile, the rise in part-time work and the fact that over a million people are working fewer hours than they would want is worrying. Because some of the fall in unemployment is down to seasonal vacancies, it is likely that unemployment will rise again before the summer as Yvette Cooper explained today.
Even more concerning is that the number out of work for over a year is up 29,000 on the quarter and may continue to rise. And there is still significant uncertainty about medium term job prospects.
Credit: Graeme Cooke
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