Where have the 376,000 new jobs come from?
Ed Balls’ speech this morning highlighted that a significant proportion of annual jobs growth (69%) was a result net employment change of +259,000 between March – September 2010, with the last six months only seeing the net creation of 118,000 posts (31% of the annual rise).
There are some more facts behind this figure that it’s worth highlighting.
First of all, the annual increase in private sector jobs was 520,000, offset by a 143,000 fall in public sector employment to give the net figure of 376,000. Most of these private sector jobs (70%) were also created in the March – September period. The fall in public sector work has been more evenly split – 55% (78,000 jobs) over the last six months and 45% (65,000) over the previous period.
We also know that over the last year there as been a change in the balance of part and full-time work: 27.2% of all jobs are now part-time, compared to 26.9% at this time last year. Unsurprisingly, there has also been a large annual rise (135,000) in the proportion of part-time workers who can’t find full-time work, equivalent to 73% of the net increase in part-time employment.
There is very little information available about which sectors these new jobs are in, but our (thanks to my colleague Paul Sellers) initial exploration of the labour force survey data suggests that retail and manufacturing are likely to have been net job creators, with construction seeing job falls. But we have to wait until September to get sector – and wage – breakdowns of jobs for the first quarter of 2011 (when we’ll be publishing a more comprehensive analysis).
The final fact worth highlighting is that young people have not seen any annual net employment growth – net annual employment change for 18-24 year olds was -9,000. But the winners are (some) older workers who saw net jobs change of +198,000. Of all the jobs created (520,000) 38% went to this age group.
So all is clearly not well in our better than expected labour market. And the statistical conundrum that is perplexing labour market economists remains unresolved – how can a period of stagnant growth have led to the creation of so many jobs?
I don’t have the answer – and this is an issue that Richard will return to in more detail on our Labour Market Report next week – but there are a few options on the table and, unless the data are simply wrong, they may sound further warning signs about our economic health: wage restraint could be so significant that it is allowing job creation without growth or the types of jobs being created may be providing far less work than has previously been the case, indicating significant under-employment.