Unemployment still rising despite official figures says industry body
Rise in ‘hidden jobless’ keeps headline unemployment below 2.5 million despite further sharp fall in number of people in work
But says Dr John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD), the ONS data overall paints a picture of a ‘labour market in deepening distress, continuing to shed jobs at an alarming rate and with the genuine level of joblessness already above 4.5 million*.’
Commenting both on the ONS labour market data and the Bank of England’s latest quarterly Inflation Report, also published earlier today, Philpott said: “Reading the latest jobs market data alongside the Bank of England’s updated forecast for the UK economy is rather like looking at a British summer weather chart – very few bright spots amid a welter of depressing gloom.
“The jobs market is still in decline, even though the latest headline unemployment figures – which increased by 220,000 to 2.44 million - are not as bad as some had feared. Employment fell very sharply, by 271,000, in the three months to June – the number of people in full-time work having dropped by 309,000. This failed to be fully reflected in the unemployment figures because of a substantial rise of 127,000 in the number of people classified as ‘economically inactive’ i.e. jobless but not seeking work - without this, headline unemployment would probably already have topped 2.5 million.
“More than 2.1 million of these ‘hidden jobless’ say that they want to work, which points to a labour market in deepening distress, continuing to shed jobs at an alarming rate and with the genuine level of joblessness already above 4.5 million. When one adds to the mix that almost 1 million people are currently working part-time because they are unable to find full-time work – this number having increased by 104,000 in the three months to June – while the rate of growth in average earnings has slipped to 2.5 per cent per annum, it is easy to appreciate the strain the recession has brought to bear on the UK workforce.
“The situation would be less depressing if we could comfort ourselves with the prospect of a swift return to strong economic growth. But if the Bank of England is correct this is not on the cards. The best our weak jobs market can look forward to in the near term is an anaemic recovery. And at worst, as the CIPD warned earlier this week, an anaemic recovery might well trigger a further avalanche of redundancies later this year.”
* Genuine level of joblessness’ defined as 2.435 million people unemployed and actively seeking work and 2.130 economically inactive people of working age who say they want a job. Both figures from Labour Force Survey