Unemployment unexpectedly fell for the first time in 18 months in November 09, with the Office for National Statistics stating that the broadest measure* of unemployment fell by 7,000 to 2.458 million, leaving the jobless rate at 7.8%. Good news right?
Largely yes, although it must be said the headline figures mask a number of slightly worrying trends, chiefly:
- The number of people in the labour force who are neither working nor looking for work, with the inactivity total rising above 8 million for the first time since records began in 1971.
- Full-time employment fell by 113,000 to 21.2 million, while part-time employment did not rise fast enough to compensate, increasing by 99,000 to 7.7 million. These figures are following the trend of women finding part-time jobs while men, predominantly, are losing full-time ones.
- Whilst the under-24s joblessness rate fell by 16,000 to 927,000, this still left a fifth of young people out of work.
- The long term unemployed (i.e. the number of people out of work for more than a year) jumped 29,000 on the quarter to 631,000, the highest level since late 1997.
- The ONS reported that wage growth slowed to the lowest on record at just 1.1% year-on-year (excluding volatile bonus payments in the three months to November).
So, what does all this mean?
- We’re clearly not out of the woods yet.
- The next set of figures will be extremely revealing as we could reasonably expect that some of the part time jobs created in the lead-up to Christmas will have been cut. The question will then become whether we will have seen sufficient growth (or reduced decreases) in full time roles to offset this.
- The young and the regional worker is still extremely vulnerable.
- The lack of wage growth (and the potential for reduced household incomes where part time workers are replacing full time) could affect consumer spending this year – which could in turn lead to further employment pressures.
Encouraging start to the year definitely! Green shoots perhaps to early to say, but let’s hope.
* The narrower measure of people claiming unemployment benefits also dropped by more than expected in December, falling by 15,200 to 1.61 million, the biggest drop since early 2007.