Not long after reports showing optimistic employment figures, a renewed labour market downturn is signalled by a decrease in vacancies, a rise in redundancies and a rise in people claiming Jobseeker’s Allowance.
CIPD Chief Economic Adviser, Dr John Philpott, has commented on the official labour market statistics which were published earlier this week. He says:
“Today’s figures suggest that conditions in the labour market are weaker than earlier in the year. The headline improvement in employment and unemployment is relatively small and with vacancies continuing to fall and redundancies now starting to increase as public sector cutbacks begin to bite it’s clear that the underlying jobs situation is deteriorating. The number of unemployed people chasing each job vacancy is back to where it was in the dark days of the recession in the spring of 2009.”
He goes on to say that, while people being moved from other welfare benefits to Jobseeker’s Allowance accounts for a large part in the rise of people claiming, it is likely that at least half of the latest increase reflects weaker market conditions.
Philpott continues: “The welcome fall in youth unemployment should not be exaggerated. This is almost entirely due to more 16-24 year olds turning to full-time education as an alternative to joblessness. There was barely any quarterly increase in the number of young people in work.
“The labour market is on the turn, with unemployment on the headline measure as well as the claimant measure set to increase. All that remains to be seen is how bad things get. Continued slow wage growth may help dampen the rise in unemployment, but either way the pain hitting the UK workforce will be severe for some considerable time yet.”