Commenting on todayís labour market statistics

Commenting on todayís labour market statistics, Ian Brinkley, associate director at The Work Foundation, said:

ëThe momentum of rising unemployment is gathering pace. Unemployment has now cleared the psychologically important two million mark on the International Labour Organisation definition (looked for work in last 4 weeks and able to start a job in 2 weeks time), taking the unemployment rate to 6.5 per cent. The narrower claimant count measure of unemployment shows an even bigger increase, up 138,000 in December, one of the biggest monthly increases on record.

ëUp until now, it appeared that employers were using recruitment freezes and hours and pay flexibility to avoid making redundancies. This period of restraint is coming to an end. The redundancy statistics show a very sharp jump of nearly 50 per cent in redundancies reported by individuals - up from an average 180,000 to nearly 270,000 comparing the three months November-January with the previous three months. Through the rest of this year, redundancies will gather pace.

ëIn contrast to previous recessions, it is clear that services are also feeling the squeeze – at least in the private sector. Over the period March to December 2008 total employment dropped by 325,000. Manufacturing and construction saw a fall of 119,000, but services declined by 235,000. Within the service sector, the falls were heavily concentrated in some market-based services – retailing and hospitality fell by 162,000 and business services and finance declined by 188,000 (a combined fall of 350,000). This was partly offset by growth in public based and other services, including education and healthcare, which showed a combined increase of 121,000. Public sector employment has so far yet feel the downturn.í