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Longer-term and youth unemployment now the real challenge

16 September 2009

UK labour market conditions continue to deteriorate, though at a slower rate, according to figures released today by the Office for National Statistics. Nigel Meager, Director of the Institute for Employment Studies said:

‘Today’s employment figures confirm that we have entered a new phase in this downturn. A careful look at the figures shows some positive signs. For the first time since the downturn started, the number of people joining the Jobseekers Allowance claimant count in August was lower than in the month before. Further, the monthly estimate for vacancies actually nudged upwards in August, although this change is within the margin of error. Despite these positive signs, overall unemployment numbers have risen by over 200,000 and will continue to rise for some time: employment has not fallen as much as in previous recessions, partly because many employers have made efforts to retain staff through measures such as pay freezes, and short-time working. These employers will have capacity to cope with the early stages of recovery without needing to recruit. At the same time, many new school and college leavers will continue to join the existing ranks of the unemployed, keeping the numbers high.

‘In this new phase of the recession two problems are increasingly coming to the fore; Firstly, the numbers of people leaving the claimant count also declined a little, again the first time this has happened since the downturn began. This is consistent with people experiencing longer spells of unemployment. In August, the number of claimants unemployed for longer than six months rose by nearly 40,000 to almost half a million.

‘Secondly, youth unemployment is the other major challenge. We can already see in these figures some of the effects of school, college and university leavers joining the unemployed and economically inactive, with rapid increases in the 16-17 year old and 18-24 year old age bands. This will worsen in the next two months, and we will learn the true scale of the problem.’

Further information

For further information or comment, contact Nigel Meager or call , or the IES press office, or on 01273 763414.