New statistics show perkier jobs market, but may be the “calm before the storm”
Yesterday, the Office for National Statistics (ONS) published new official labour market statistics. These update the Labour Force Survey measures of employment, unemployment and economic inactivity to the period March-May 2010. The statistics of unemployed people claiming Jobseeker’s Allowance to June2010, and the average weekly earnings for May 2010, were also updated.
Dr John Philpott, Chief Economic Adviser at the CIPD, comments on the newly published statistics, stating that they are “easily the best set of official labour market figures since the start of the jobs recession two years ago”. He feels this is because there has been a sharp quarterly rise in the number of employed, fewer people economically inactive (neither in employment or unemployment, for example the retired and some students), and a welcome reduction the Jobseeker’s Allowance claimant count. Although the jobs market was looking much brighter in the spring quarter, he adds that “with close to 2.5 million people unemployed it is still far from in the pink.”
Dr Philpott suggests that “things may look a lot less rosy by spring 2011 than they do at present”, due to a large public sector “jobs squeeze” in motion and the current uncertainty of the pace of an economic recovery. He says “Today’s good news may simply be the calm before the storm.”
He goes on to say that the CIPD were unsurprised at the employment pick-up of spring 2010, as their own surveys of employers’ hiring intentions had anticipated such results. However, surveys since have suggested the rate of recovery has slowed since spring, “placing a question mark over whether the private sector will in the short-run generate enough jobs to offset mounting public sector job cuts.“Moreover, while the jobs market improved in the spring, all the new jobs being created were either part-time, temporary positions or filled by the self-employed.” The number of people in part-time jobs due to being unable to find full-time jobs has further increased, reaching 1.06million, while the amount of full-time employees continued to drop.
Encouragingly, though, the latest employment figures indicate that “conditions in the youth jobs market have, at the very least, stopped getting worse and might even be starting to improve”. Dr John Philpott feels that this is the most positive feature of such statistics, although he adds: “What is unclear is the degree to which this reflects the impact of policy measures taken by the former Labour government, which are now being withdrawn by the Conservative-Lib Dem coalition. This makes it imperative that the coalition gets its planned Work Programme up and running as soon as possible.”