CIPD Update: Cheer as unemployment figures drop
Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) comments as follows on official labour market statistics published earlier today by the Office for National Statistics (ONS):
“Today’s jobs figures showing another increase in the number of people in work and fewer unemployed will cheer the Chancellor of the Exchequer ahead of his speech at the Mansion House this evening. Signs that wage pressure is moderating in the face of higher inflation will also come as good news to the Bank of England. This should counter the case for a hike in interest rates later in the year.
“The only obvious concerns are that job vacancies appear to be drying up, while the number of people on Jobseeker’s Allowance is clearly on the rise, although the latter increase owes much to changes in the benefit regime and should not in itself be taken as a sign that the jobs market is starting to weaken.
“Another potential worry is the ongoing scale of job losses in the public sector. Public sector employment excluding the nationalised banks fell by 135,000 in the financial year 2010-11. This is many times bigger than the initial Office for Budget Responsibility (OBR) forecast at the time of last June’s emergency budget and closer to CIPD estimates at that time. If the OBR forecasts for the period to 2015 as a whole prove similarly optimistic the impact of public sector job cuts on overall unemployment could be significantly worse than the Government currently expects.”