Unemployment has unexpectedly fallen. The labour market effectively remains in a holding pattern with encouraging headline numbers, but worry underlying trends.
Today’s labour market statistics show an unexpected fall in unemployment. The labour market effectively remains in a holding pattern with encouraging headline numbers, but worry underlying trends. Much will depend on the strength of recovery and what happens in the public sector.
ILO unemployment is down 33,000 on the quarter to January 2010 with the number of people claiming Jobseekers’ Allowance (the claimant count) down 32,300 in February. This is the largest monthly fall in the count since November 1997 and particularly positive given that the period after Christmas is normally a tough month for jobs. Unemployment now stands at 2.45 million or 7.8 per cent.
Youth unemployment is also down – by 34,000 on the quarter and on the JSA count too. Meanwhile, vacancies are up by 39,000. All this is evidence of things moving in a good direction – or at least not getting worse.
Commentators will focus on the 149,000 rise in the number of people who are inactive, but 98,000 of these are actually extra students. Along with the continued reduction in working hours, this explains why the headline figures are encouraging. In essence, people are reducing hours or are doing other things while the job market is tough. Less encouraging is the fall in employment, which is down 54,000 on the quarter, and the 61,000 rise in long term unemployment – now at the highest level since August 1997.
Looking ahead, the prospect of public sector jobs cuts looms on the horizon. In the quarter to December 2009 there was a 7,000 rise in public sector employment, alongside a 61,000 decline in private sector employment.
6 Responses to “Labour market in holding pattern”
House Of Twits
RT @leftfootfwd The labour market is in a "holding pattern": encouraging headline numbers but worrying underlying trends http://cli.gs/pQ6bE
suddaf chaudry
RT @houseoftwits: RT @leftfootfwd The labour market is in a "holding pattern": encouraging headline numbers but worrying underlying trends http://cli.gs/pQ6bE
John77
What the statistics show is a further fall in employment with a reported not real decline in unemployment arising from 149,000 people stopping looking for jobs. Output is down by more than employment because a lot of workers have been put on short time to minimise sackings and share the pain.
No things are getting worse and that youth unemployment is down 34,000 because 98,000 students have taken themselves off the register is hardly a sign of things getting better – the number of 16-17 year-olds and 18-24 year-olds in work have both fallen, the number of workforce jobs is down 119,000. The numbers employed are flattered by including 1.036 million who are only working part-time who took a part-time job because they couldn’t find as full-time one.
The numbers could be worse but they show a continued decline in jobs and a fall in real (inflation-adjusted) earnings in the private sector while public sector workers benefit from above-inflation pay rises.
Katie Darden
Labour market in holding pattern | Left Foot Forward: In essence, people are reducing hours or are doing other thi… http://bit.ly/cSOL4S
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