From the TUC

Unemployment figures: employment on a knife-edge

17 Dec 2009, by in Economics, Labour market

Yesterday’s figures capped was another month of mixed results. Once again, youth unemployment defied the pessimists and failed to pass the one million mark, the claimant count again showed signs of improvement, the number of people in employment rose and there was a tiny increase in vacancies. Other figures still look gloomy, especially for long-term and youth unemployment and there are now more than one million workers in involuntary part-time employment and a third of all temporary workers would prefer a permanent job.

Overall, the employment and unemployment figures may have begun to get worse at a slower rate but it is still too early to say that they are getting better; I feel a quotation from Churchill coming on…

Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.

The claimant count measure of unemployment shows some signs of improvement. Each month’s employment statistics includes a provisional figure provided by Jobcentre Plus for the number of people who were claiming Jobseeker’s Allowance in the previous month, and a revised figure for the month before that. Yesterday’s statistics gave the provisional figure for November as 1,626,200 – down from 1,632,500 in October, the first fall since February 2008. The sense of an improvement was underlined by the fact that the revision of the October figure also brought it down, from the figure of 1,639,500 that was announced in last month’s figures.

ILO unemployment has been less volatile so far, with the percentage change from month to month only exceeding 4% on two occasions. The long period during which the claimant count was rising more quickly saw the claimant count rise from being about 50% of the ILO measure at the start of the recession to about two thirds in March 09, where it has remained ever since.

Changes in unemployment during the recession (%)

graph: Changes in unemployment during the recession

In the three months from August to October ILO unemployment was 2,491,000. This is 30,000 higher than the figure announced last month (which covered the period July – Sep) and 21,000 than in May – July. Unemployment is 608,000 higher than it was 12 months earlier.

Year-on-year increases in unemployment stopped rising in the summer, but it will be July or August 2010 at the earliest before we see figures that are lower than they were 12 months previously:

Change in unemployment from 12 months previously

graph - changes in unemployment

Compared with the figures announced in November:

  • Men’s unemployment is 16,000 higher.
  • Women’s is 14,000 higher.
  • There are 9,000 more unemployed people aged under 25 and the total stands at 952,000.
  • 6,000 more aged 25 – 49, and
  • 14,000 more aged 50 and over.

Long-term unemployment continues to rise very quickly. There are now 620,000 people who have been unemployed over 12 months. In Feb – Apr 2006, that was the number of people who had been unemployed for over 6 months. Long-term unemployment is now 2,000 higher than it was in last month’s figures, 49,000 higher than in May – July and 182,000 higher than 12 months ago. 192,000 people aged under 25 have been unemployed for over a year.

After three months in which the number of vacancies notified to Jobcentres has remained steady at 431,000, there was an increase this month to 432,000 (remember, this is a provisional figure, and could be revised down).

There was a welcome increase in employment of 53,000, compared with May – July. Unfortunately, the latest figure 28,926,000 is 1,000 lower than last month’s. It is 432,000 lower than the figure 12 months ago. Women’s employment is rather stronger, however, and stands 74,000 higher on the quarter and 8,000 higher than last month’s figure. Unfortunately, it is still 31,000 lower than it was 12 months ago.

Part-time employment is still rising. There are now 7,566,000 part-time workers, 126,000 more than in May – Jul, 37,000 more than in last month’s figures and 219,000 more than a year ago. There are 1,009,000 workers who say they are in part-time jobs because they could not find a full-time job (13.3% of all part-time workers); in the course of the past 12 months the number of workers in this position has increased by 281 thousand – 39%.

The picture is a little more mixed when it comes to temporary employment. There are 1,440,000 workers in temporary jobs: seven thousand more than in last month’s figures but five thousand fewer than in the May – Jul figures. The year on year increase is 70,000. Involuntary temporary employment has shown a more consistent trend: 464,000 people are in temporary work because they could not find permanent employment. This is 32.2% of all temporary workers, an increase of 6.9 percentage points over the past 12 months.

Involuntary economic inactivity is also rising. 2,260,000 economically inactive people say they want a job, up 16,000 from last month’s figures, 114,000 on the quarter and 136,000 on the year. 989,000 economically inactive men say they want a job – this is the highest figure since these statistics were first collected in 1993. The figure for women – 1,271,000 – is the highest since February 2003.

Plainly the labour market is still very shaky. It is far too early to say that an employment recovery is under way; the government’s investment in the future of unemployed people is paying off. Turning off the tap now would risk a rapid return to rapidly rising unemployment.

2 Responses to Unemployment figures: employment on a knife-edge

  1. Dale B. Halling
    Dec 17th 2009, 6:59 pm

    Innovation is the only way to increase real per capita income and increase employment. The consumption side economic policies we are pursuing are just digging us a bigger hole. Since 2000 we have passed a number of laws and regulations that are killing innovation in the US. The incredible innovation of the 90s was based on technology start-up companies built on intellectual capital, financial capital, and human capital. All three of the pillars have been under attack since 2000. Our patent laws have been weakened reducing the value of intellectual capital. Sarbanes Oxley has made it impossible to go public reducing financial capital for start-ups and the FASB rules on stock options have made it harder to attract human capital to start-ups. If we want to create jobs, we need to have laws that encourage entrepreneurial start-ups.
    This issues are discussed in more detail in my book The Rise and Fall of the American Entrepreneur: How Little Known Laws and Regulations are Killing Innovation – for more information see http://hallingblog.com/my-forthcoming-book-1209/

  2. Robert
    Dec 28th 2009, 1:53 pm

    I’m disabled and before you say anything yes it’s real, I’m classed as being dead from the waist down, some say that includes my brains, but hell I’m use to having real nice things said. I was down at the job center s few months ago before they kicked me out and told me to come back next year April in fact.

    But I had to go through the new medical for ESA and was told I cannot work but could do community work, so i would not then be listed as disabled.

    I now do an hour a week for my benefits, but as yet they have been unable to find me anything to do.

    My Nephew is now doing a training course in college, he does an hour a week because they have so many people they do not have the places so everyone does an hour, of course once your on these courses your not classed as being unemployed.

    fact is this has to be the lowest method of keeping the numbers down it’s as bad as Thatcher and Blair using sickness and IB.

    what are the real number of unemployed in the UK, I bet it’s not far off 5 million plus.