Mixed labour market figures show need to maintain investment
Today’s labour market figures are, as with previous recent releases, mixed. While unemployment on the ILO measure has risen, the claimant count continues to show sharp falls. This partly relates to the periods of measurement in question – the claimant count data is for March 2010, while the ILO data refers to the December 2009 – February 2010 period.
It also turns out that ONS’s claimant count data has experienced some significant revisions in recent months. First, we had the widely reported 23,500 rise in JSA claimants in January of this year. In last month’s ONS release, this was revised down to an increase of 5,300. This month, the increase is back, with today’s data documenting a rise of 16,200 between December and January. The upshot of this is that there does appear to have been a jump in the number of claimants towards the end of last year, and this is now being reflected in today’s ILO figures, which cover this period.
The claimant count data also documents changes in the ‘inflows’ (numbers of people moving onto JSA each month) and ‘off flows’ (numbers of people leaving the benefit). These show that rather than resulting from an increase in rates of job loss (in flows) the claimant count rise was a result of a steady rate of inflow, combined with a reduced rate of off flow – between December and January 21,000 fewer people moved off JSA than between November to December.
This suggests that while (at least while public spending levels are maintained) large scale job cuts of the scale we saw in late 2008 may be behind us, rates of job creation are not yet picking up. Wider labour market data also support this hypothesis – for example while redundancies are still falling (down 20,000 on the quarter), vacancies showed a slight fall of 7,000 between the Dec-Feb and Jan-March rolling quarters and only showed a small calendar quarterly rise. In addition, the number of jobs in the economy is continuing to show sharp falls (down 119,000 on the quarter to December 09) and employment levels, this month for both full and part-time positions, continued to decline over the December – February period.
It is important to remember that despite its ongoing weakness the labour market is in a far better state than at comparable points following the 80s or 90s recessions. But the risks of a jobless recovery do still seem real – taking demand out of the economy with sharp cuts in spending and investment could do real damage.