By Claire West

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):

“The private sector looks to have enjoyed a mini jobs boom in the second quarter of the year as the economic recovery gathered pace, with full-time employment in particular showing a most welcome rise. This was easily enough to offset a 22,000 drop in public sector jobs — in line with expectations - allowing unemployment to fall despite a sharp rise in the number of people entering the labour market. The result was a ‘jobs rich’ recovery for the UK in the spring and early summer, in stark contrast to the jobless recoveries experienced in the United States and much of continental Europe in the past year.

“But this mini jobs boom is unlikely to last. This is partly because the rise in employment was probably boosted by a one-off unwinding of the recruitment freezes introduced in much of the private sector during the recession. And with many businesses still operating below capacity having hoarded labour in the downturn it may require a much stronger and sustained economic recovery to maintain hiring rates. Indeed, forward looking surveys indicate that hiring activity dipped in the late summer, which may explain why the latest official figures also show a slight fall in job vacancies in the quarter ending in August and a small rise in the number of people unemployed and claiming Jobseeker’s Allowance.

“The latest figures will give considerable heart to those who believe the private sector will be more than capable of making up for the 600,000-700,000 public sector job cuts as a result of the coalition government’s planned austerity measures, especially if average pay increases continue to fail to match price inflation, putting downward pressure on real earnings. But with the spending squeeze set to dent short-term prospects for economic growth, it is far too soon to rule out a renewed rise in unemployment once the cuts really start to bite.”