There has been diverse reaction to the Official labour market statistics published yesterday by the Office for National Statistics. The mixed picture of the UK labour market offers room for both optimism and pessimism.
The results appear to show a headline rise in unemployment. This suggests that the labour market weakened at the turn of this year, before the impacts of the Coalition Government spending cuts and tax increase began to take full effect.
The figures show that public sector employment had already fallen by 123,000 in the year December 2010. The CIPD suggest that the eventual cull of public sector jobs by 2015 could be considerably higher than what the current Office for Budget Responsibility estimates suggest.
As 2011 took off, the CIPD cautioned that the official jobs data would be difficult to interpret in the first few months of the year. This reaction is a result of their independent survey that showed a pick-up in demand for labour towards the end of 2010. However this was shortly followed by a further dip in the first quarter of 2011. As an estimate on current trends, the CIPD still expect headline unemployment to reach 2.7 million by the end of 2011 and continue to rise into 2012.
Despite this negative outlook there is still optimism within the employment levels of the private sector. Figures are showing an increase in the number of people employed within the sector and fewer people on welfare benefits. These results offer hope that the labour market may be able to cope better with the economic headwinds than expected. This is great news for optimists within the employment market, as the results indicate that the labour market is far from collapsing.
However, as stated in the ‘Youth Unemployment’ blog, it is important to remember the distorting effect that 16-24 year olds in further and higher education have upon the headline rate and level of youth unemployment. The CIPD suggest that 1 in 8 people within this age group are unemployed, yet almost 30% of those are actually full-time students. Despite the fact there may be fewer unemployed youths that anticipated, the levels are still high and solutions must be adopted as soon as possible.