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What do the latest unemployment figures actually mean?

  26th March 2012      
 CIPD, Company News, Employment

Dr John Philpott, The Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD), has given his views on the employment statistics for November 2011-January 2012, which were released earlier this month.

The report showed some good news, regarding the slowdown of the unemployment rate, with the creation of private sector jobs managing to outweigh the public sector job cuts. Furthermore, there has been an increase in job vacancies since last autumn. However, Dr. Philpott concludes that it’s far too early to say whether “this signals a turning point in the labour market – a similar period of stability this time last year was followed by a renewed downturn — [although it does] demonstrate the ability of the UK economy to create jobs once a more robust recovery gets underway”.

Unfortunately though, despite this apparently good news, the rise in employment is actually being largely driven by a growth in part-time jobs — leaving a record 1.3 million people in need of full-time work, having to make do with fewer hours. The Chief Economic Adviser comments that when combining this reality “with a very low rate of pay increases – which are still lagging far behind price inflation – the emergence of ‘part-time Britain’ shows that even though the rise in unemployment may be slowing there is an increasingly tight squeeze on most people’s standard of living”.

When looking at specifics, the statistics show that youth unemployment has increased – although this has been attributed to the numbers of young people in full-time education. John Philpott also warns that “care should be taken in interpreting the rise in female unemployment”. Although the report shows that the rise in female unemployment (up 22,000) was significantly higher than the rise in male unemployment (up 6,000), it seems that this is not down to a reduction in the number of women in work. In fact, the increase in female unemployment is due to the rise in the number of women entering the labour market. Going even further Dr.Philpott says:

“On the contrary, it is men rather than women who have experienced a fall in employment over the past year. The current popular narrative suggesting that female employment is falling and unemployment rising relative to that of men because of the impact of fiscal austerity is, therefore, not supported by the available data.”

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