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) which update the Labour Force Survey measures of employment, unemployment and economic inactivity to the quarterly period February-April 2010, Public and Private sector employment to March 2010, the count of people unemployed and claiming Jobseeker’s Allowance to May 2010, and average weekly earnings for April 2010:
“Judging by these latest figures the UK jobs market is in somewhat better shape than for a while but remains fairly flat. The rise in headline unemployment has slowed, claimant unemployment continues to fall, and employment is broadly stable with growth in private sector jobs (up 12,000 in the three months to March) just outstripping a fall (down 7,000) in public sector jobs. The rise in headline unemployment is again dampened by a rise in the number of economically inactive people, though in a break with recent trends this is due to more people giving up looking for work saying they are long-term sick rather than an increase in student numbers (student numbers having fallen in the latest quarter).
“Signs of recovery in the private sector jobs market – which reflect the findings of forward looking surveys of employers hiring intentions, including the CIPD’s own quarterly survey - are welcome but beg the question whether the private sector will be able to fill the jobs gap once the process of public sector downsizing gets fully underway. Spending cuts announced by the coalition government for the current financial year will reduce public sector employment by around 50,000 by next spring, on top of any reductions already in the pipeline. And next week’s Emergency Budget will contain measures that will lead to a subsequent mass cull of public sector jobs. In the absence of a strong private sector jobs recovery, the cull will lift headline unemployment toward 3 million by 2012.
“Moreover, while the private sector jobs market is improving all the net new jobs being created at present are either part-time, temp positions or filled by the self-employed. The number of employees and self-employed people working part-time because they could not find a full-time job has increased to 1.08 million, the highest level recorded since comparable figures were introduced in 1992. And while formal public sector jobs are falling it’s clear that spending by the previous government on training and employment programmes for the unemployed supported a substantial increase in the number of young people in work during the early part of this year. The February-April quarter saw the first quarterly increase (48,000) in the number of 18-24 year olds in work since the start of the jobs recession in 2008. The coalition government will need to demonstrate that its welfare to work measures can maintain this momentum at a time when public spending is being cut.”
