Zookel Blog: News & Views

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?

1. We’re clearly not out of the woods yet.
2. 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.
3. The young and the regional worker is still extremely vulnerable.
4. 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.

Regards,

Zoe

* 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.