View your shopping bag

Items: (0) £0.00
  • €
  • $
  • £

Checkout

Unemployment rises but could be flattening out

The headline figure shows that UK unemployment rose by 28,000 to 2.67 million in the three months to January, according to figures released today by the Office for National Statistics. This meant that the unemployment rate rose to 8.4% from 8.3% on the quarter, and this is the highest it has been since 1995.

Signs of growth in private sector employment

On the other hand there were 29.12 million people in employment, which was a rise of 9,000 on the quarter. But this was a “tale of two sectors”. The number of people employed in the public sector fell by 37,000 over the quarter to reach 5.94 million, which is the lowest figure since June 2003. By contrast, the number of people employed in the private sector rose by 45,000 to reach 23.17 million. Good news in that for one quarter at least the private sector has been able to generate jobs at a faster rate than the public sector is losing them.

In fact, the Institute for Public Policy Research, a think tank more on the political left, has just noted that there is a widening North-South divide in the country. The number of unemployed people in the North has risen by 15% over the past year compared to 8% nationally. The Institute called for “..a greater focus on cities in the North if we are ever to get out of the mess the UK economy is in.”

But, there will be few resources available to do anything about this situation even if the government had the will to remedy it. And, part of the present problem, has been the fact that in the past public sector jobs have been ‘exported’ to the North, and now the region is bearing the brunt of the cuts in public sector jobs which will be ongoing over the next couple of years.

Other statistics from the ONS shows that the alternative measure of unemployment, the number of people claiming Jobseeker’s Allowance was up by 7,200 in February to 1.61 million. With the increases in employment levels and the fact that the last quarter’s rise in unemployment was the smallest quarterly increase since the three months to May 2011, there are hopeful signs that unemployment may be reaching a plateau.

However, one major downside of the figures is that youth unemployment rose by 16,000 to 1.042 million amongst 16-24 year olds, which is a rate of 22.5%.

Finally, somewhat surprisingly, the increase in average earnings including bonuses rose by only 1.4% on a year earlier, and this was down from a rate of 1.9% in the three months to December. Although the rate of CPI inflation is now falling, and should return to its 2.0% target level later in the year, average earnings are increasing at a falling rate, which shows that real incomes are dropping and this will continue to put a squeeze on consumption spending which will not help the recovery.

Tags: , , , ,
Posted in Employment, unemployment

Comments are closed.