So what’s to be made of the latest unemployment figures announced by the Office of National Statistics? On the face of it, it’s positive news. Unemployment fell, the number of people being made redundant dropped to its lowest level since the start of the recession, employment rose by 118,000 and the number of jobless 16 – 24 year olds did not break the politically sensitive 1 million level. So all good then? Or is it?
The latest quarterly Labour Market Outlook from the Chartered Institute of Personnel and Development shows that 39 per cent of employers are planning to cut jobs – the highest level since the survey began in 2004. It also said a slight rise in private sector recruitment was being cancelled out by the cull in the public sector. Not looking so good now.
There is a view that unemployment is a lagging indicator of the economy and has yet to reflect the impact of the austerity measures – the slowdown in consumer spending and the pending cuts in the private sector. Plus closer analysis of the figures suggest that the bulk of the rise in employment came in January and since then numbers have fallen away, signalling a slowdown in job creation. That, coupled with the increase in claimant count to 12,000 in April could suggest that the job market is actually losing impetus.
How confusing for us mere mortals. Sadly my belief is that we have some way to go before we can say we are on the road back to recovery. I agree with economist Howard Archer, and have stated thus in a previous blog, that unemployment will go up again later in the year as the private sector will be unable to fully compensate job losses in the public sector.
Watch this space.
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