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Small drop in unemployment

In the three months to September, the total number of people unemployed fell by 9,000 to reach 2.45 million. This gave an unemployment rate of 7.1% which was 0.1% down on the quarter.

The picture is similar when we look at those claiming Jobseeker’s Allowance (also called the claimant count), with a fall of 3,700 between September and October, to reach 1.47 million. However, on the downside, the number of vacancies in the three months to October was 453,000, which were 27,000 down over the quarter. Given the coming round of public sector employment cuts, it is far from ideal to see vacancies falling.

There was a bigger rise in the number of people in employment in the three months to September than the decline in unemployment would lead us to expect. In fact, there was an increase of 167,000 over the quarter to reach total employment of 29.19 million. This was partly due to the fall in the number of people classed as inactive of 83,000 over the quarter.

The number of people taking part-time jobs because they cannot find full-time ones, has reached a record high of 1.15 million.


Total employment is now up 286,000 on the year, although it is still 210,000 lower than two years ago.

But, we do need to dig behind the employment figures to see exactly what is happening. If something appears to be too good to be true, it usually is. The latest quarterly increase in employment was largely due to an increase in self-employment, which rose by 112,000. There are now 4.03 million people self-employed in the country which is a record figure. This probably means that the job market is so tight, that more people are trying to make a go of it on their own. This could be more out of desperation than a surge in the ‘entrepreneurial spirit’.

The other factor fuelling employment was the rise of 94,000 in the number of part-time workers to reach 6.76 million. At the same time as this figure rose, the number of full-time workers fell by 62,000. This suggests that firms are being cautious in their hiring policies. It may be that when a full-time employee leaves or retires, they are replaced by a part-timer.

In fact, the number of people who are self-employed or working part-time and would like to work full-time, rose by 67,000 in the last quarter to reach a total of 1.15 million. This is the highest this total has been since comparable records began in 1992.

The figures also showed that the earnings annual growth rate for regular pay (excluding bonuses) was 2.2% for the three months to September 2010, up from 2.0% for the three months to August. So there has been a slight increase in pay rates but this has to be set against the CPI inflation rate of 3.2% in October. This means that those lucky enough to have a job are on average seeing their real incomes falling, but as I say, those are the lucky ones.

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Posted in Earnings, Employment, labour markets, unemployment

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