Zookel Blog: News & Views

Unemployment & the £1Billion saving

As reported by many sources this morning – experts believe Alistair Darling could be in line to receive a £1 billion dividend from lower than expected unemployment figures in time for next week’s Budget.

Sounds like good news right?

In truth I’m not so sure. Why? Here are the simple facts:

  • The number of people claiming unemployment benefit had fallen at the fastest pace in 13 years last month. Alongside this unemployment also dipped for the third month in a row.  +VE
  • The number of long-term unemployed — those out of work for a year or more — jumped by 61,000, or nearly 10 per cent, in the three months to January. -VE
  • Unemployment dropped to 2.45 million in the three months to January, according to the ONS. +VE
  • The rate of employment, measuring the number of people in work, also fell to a 13-year low of 72.2 per cent. The number of people in work dropped by 54,000 to 38.8 million in the three months to January. –VE
  • The number of people claiming jobseeker’s allowance in February dropped from 1.63 million in October last year to approx. 1.58 million people. +VE
  • The number of people dropping out of the jobs market altogether has risen sharply. Indeed “economically inactive” people — those who cannot work because they are studying, sick or looking after children — climbed by nearly 150,000 to a record 8.1 million in the three months to January*1. –VE
  • Independent forecasts that the jobless total will now peak at a lower level than expected (hence the saving accruing to Mr Darling due to decrease benefit payments). +VE
  • More than one in four people in Britain of working age is now either unemployed or not looking for work. -VE

Summary:

There are definitely some good positives, but also enough offsets (or warning signs) that it would be premature to say we’re out of the woods in terms of jobs. In truth whilst a lot of us are feeling more positive*2 not even the most aggressive economist will be able to make that call (with any degree of confidence) until such time that we see true meaningful economic growth.

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*1 figures from the Office for National Statistics (ONS)

*2 Warning: an overly positive outlook is a common character trait of start-up employee.

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