From the TUC

Old Exell’s Almanac: Employment figures

19 Jan 2010, by in Economics, Labour market

It is very hard to predict what tomorrow’s employment and unemployment figures will look like and very risky to pull out one month’s results and announce that we have either turned a corner or that things are worse than ever. These figures shift about a lot and there are plenty of ‘blips’ – odd months when there is a one-off exception to a rising or falling trend.

Against this background, what changes would be significant?

Jobs, jobs, jobs

A good indicator to start with is the number of workers in full-time jobs. Many employers in this recession have been reluctant to make their workforce redundant, because they know they will be needed when the recovery begins. Businesses and their workers have responded by switching to part-time work; at the same time, some businesses have had the opportunity to create new jobs, but have decided that the current level of demand does not yet justify recruiting people to full-time work. In the past year, the number of workers in full-time jobs has shrunk by more than 600,000, while the number in part-time jobs has grown by more than 200,000.

Workers in full-time jobs, change on previous month:

Month Workers in full-time jobs (000s) Change since previous month (000s)
July

21,467

Aug

21,360

-107

Sep

21,311

-49

Oct

21,346

35

Nov

21,263

-83

Dec

21,226

-37

Workers in full-time jobs, change on previous month (000)

The trend has been for the number of full-time jobs to come down, falling by 120,000 over the past two months. The blip in the chart for October reminds us not to over-interpret one month’s results, but it would be a hopeful sign if the figures in January’s results remained over 21.2 million.

Unemployment, obviously

The other key figures are for unemployment. There are two main measures:

  • The ‘claimant count’, which measures the numbers claiming Jobseeker’s Allowance.
  • ‘ILO unemployment’ – using the internationally recognised definition of unemployment. The Government bases its policies on this measure.

Claimant count and ILO unemployment, change on previous month:

Claimant Count

ILO unemployment

Month

Level (000s)

Change since

previous month

Level (000s)

Change since

previous month

July

1,560

2,381

Aug

1,583

23

2,435

54

Sep

1,607

25

2,470

35

Oct

1,627

19

2,469

-1

Nov

1,640

13

2,461

-8

Dec

1,626

-13

2,491

30

These figures have taken different paths over recent months; the TUC expects that ILO unemployment will pass the 2.5 million mark before it starts to fall, though even this will be significantly lower than the 3 million total we thought probable 12 months ago – a testament to the effectiveness of the Government’s active response to the crisis.

If the figures for ILO unemployment started falling again, or at least remained below 2.5 million that would be a very positive sign. Another fall in the claimant count would be a good sign; a figure below 1.6 million would be excellent.

Youth unemployment

Young people have been the big losers in this recession. The unemployment rate for people aged 18 – 24 is 18.4 per cent, far higher than the 6.3 per cent rate for those aged 24 – 49 or 4.5 per cent for over 50s.

The number of unemployed 18 – 24 year olds has been rising steadily in recent months.

Youth unemployment, change on previous month:

Month

Number (000s)

Increase on previous month

Jul

726

Aug

722

-4

Sep

731

9

Oct

743

12

Nov

746

3

Dec

757

11

Another increase over 10,000 would be cause for concern, and would suggest that it will be a long time before the youth recession ends.

These figures do not include unemployed 16 and 17 year olds, as these data have been strongly affected by school starting and finishing dates. There was a fall in 16 – 17 year old unemployment of 20,000 last month and the increase in unemployment for this age group (which was already high at the start of the recession) has been less marked than for 18 – 24 year olds. There are currently 195,000 unemployed 16 and 17 year olds, and this figure is likely to rise this month, because there will be no compensating increase in the numbers returning to education.

Total under-25 unemployment is now 952,000 and some commentators have been predicting an imminent rise over the 1 million mark for a long time. We do not expect this to happen this month – it would require an increase similar to that normally seen at the end of the academic year – but any figure over 980,000 would be a bad sign.

Long-term unemployment

After looking at straws in the wind and pine cones, the damp seaweed is the figures for long-term unemployment. It is long-term unemployment that destroys happiness and shatters self-confidence. Last month saw a significant deceleration in the rate at which the number of people of people who are unemployed over 12 months has been growing, and this followed a similar, though less dramatic fall the previous month.

Long-term unemployment, change on previous month:

Month

Numbers (000s)

Increase on previous month (000s)

Jul

528

Aug

543

15

Sep

567

24

Oct

599

32

Nov

618

19

Dec

620

2

Long-term unemployment, change on previous month (000)

Is this a blip, or the start of a trend? It would be unwise to bet on its being a trend; we would expect long-term unemployment to continue rising until after overall unemployment has begun to fall. We would be very pleased to be proved wrong, and another increase of less than 10,000 would be a good sign.

One Response to Old Exell’s Almanac: Employment figures

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