By Max Clarke
Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) comments as follows on official labour market statistics for the September-November 2010 quarter published earlier today by the Office for National Statistics (ONS):
“The latest jobs market figures are disappointing albeit that the underlying trend in employment and unemployment toward the end of 2010 suggests a modest rather than drastic deterioration in market conditions. Nonetheless, it is clear that the combination of a jobs market in the doldrums, slow pay growth and sharply rising price inflation was already driving up the UK’s ‘misery index’ well before the impact of this year’s cut in public spending and the hike in VAT and other taxes start to be felt.
“Women account for more than three-quarters of the fall in employment in the latest set of jobs figures, with most of this showing up in a rise in the number of women who are economically inactive rather than unemployed. The number of ‘workless women’ in the UK — those economically inactive who say they want a job plus those unemployed and actively seeking work — now stands at 2.36 million. This remains below the equivalent figure for men of almost 2.5 million but the gap is set to narrow with cuts in public sector employment likely to fall far more heavily on women than men. A large quarterly fall of 59,000 in the number of women employees in part-time employment is a clear sign that a ‘female jobs recession’ is already underway.”
Also commenting on today's figures, David Kern, Chief Economist at the British Chambers of Commerce (BCC), stressed the fragility of the UK's economic recovery, saying:
“These figures are disappointing and once again slightly worse than expected. For the second month in a row unemployment is up, employment is down and the level of inactivity has seen a marked increase. Employment has declined for both full time and part time jobs and the number of people working part time because they could not find a full time job rose to its highest level since comparable records began in 1992. In addition, a record number of young people are out of work.
“While longer-term trends still show that the UK labour market remains relatively robust, the new figures highlight the challenges facing the economy in the months ahead when the austerity programme is implemented more forcefully.
“In light of these figures, we reiterate our forecast that unemployment is likely to increase to 2.6m over the next year, a further net rise of around 100,000. With the prospect that private-sector employment could decline over the next year, it is critical that private-sector businesses are able to create new jobs.
“The relatively low earning figures confirm our assessment that domestic inflationary pressures remain modest which should give the MPC the encouragement to maintain interest rates at their current low levels for the time being. These figures suggest that a premature increase in rates may add to the unemployment total. On its part, the Government must ensure that the labour market remains as flexible as possible. Onerous regulations, such as the recent rules relating to paternity leave also risk making the jobless total higher.”