By Max Clarke
Figures out this morning showed a surprise drop in unemployment across the country. Following are comments from business, personnel, and workers' union leaders:
"The surprise fall in unemployment is good news for the millions of people looking for work, although the fall in the number of vacancies from last month is a worrying sign,” commented the trades union congress General Secretary, Brenden Barber.
Though Barber also cautioned: 'Rising long-term unemployment and youth joblessness close to a million offer a sobering reality check on today's upbeat figures.
Commentators have been quick to state that the slight drop is no cause for complacency, and that the figure is in fact expected to rise in coming months, as public sector losses continue.
David Kern, Chief Economist at the British Chambers of Commerce explains: “We are expecting UK unemployment to increase further over the next year, and to peak at around 2.65 million before starting to decline. These figures show that growth in earnings has weakened, particularly in the private sector, and reinforces the case against an early increase in interest rates. Since there is little risk of a wage-price spiral, the MPC should postpone interest rate increases until later in the year when the recovery is more secure.”
Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) and expert on employment and the economy discusses the results:
“It’s clearly good news week for the UK economy. The inflation rate is down, unemployment is down, and pay pressure is down."
"However", warned Philpott, "while the jobs figures are apparently signalling green for go, they reflect an improvement in the labour market at the turn of the year and don’t tell us anything much about the road ahead. Indeed, the most up to date figures for vacancies and claimants of Jobseeker’s Allowance suggest that labour market conditions softened again in the early spring and it remains likely that unemployment will start to rise again later this year.
“Especially welcome in today’s figures is a substantial rise in the number of people working full-time, although this was still insufficient to prevent a further increase in the number of people working part-time who would prefer a full-time job.
“The easing in pay pressure suggests that fears of an inflationary pay-price spiral remain unwarranted. This may be bad news for workers who are suffering a big squeeze on real earnings but is very good news for interest rate setters at the Bank of England and for the wider economy.”