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Unemployment reaches 2.5 million, but peak uncertain
21 April 2010
There is more mixed news on unemployment from the ONS April release; the broad measure unemployment rose by 43,000 in the three months to February, reaching 2.50 million. This is the highest figure since December 1994. However, the narrower claimant count measure fell in March for the second consecutive month, by 32,900 to 1.54 million.
The number of people in employment declined by 89,000, to 28.82 million over the quarter. The employment rate was 72.1 per cent, the lowest since October 1996. There was also a rise of 110,000 in the number who are economically inactive to reach 8.16 million. This increase was largely driven by growing numbers of students.
The number of vacancies for the three months to March was up by 9,000 from the previous quarter. However, the growth in vacancies, which looked to be gathering pace during the later part of 2009, appears to have stalled and the on month figures show a slight decline.
Nigel Meager, Director of the Institute for Employment Studies, commented on the latest figures:
‘Unemployment has now reached 2.5 million. Although it appears increasingly unlikely that it will reach the three million figure which some commentators were predicting it is difficult to say whether it has yet peaked. A good deal of the focus is now on the looming cuts to public sector employment, although the scale and timing of these is as yet unclear. The overall impact on employment will partly depend on the extent of new jobs growth in the private sector as we emerge from the recession: early signs, are that this will be relatively slow, given the extent to which companies have held on to staff in the downturn. What is clear, however, is that the impacts will be felt differentially across the country. Public sector jobs are a particularly important source of employment in Wales, Scotland and northern England, accounting for more than a third of total employment in some towns and cities. Furthermore they tend to be located in the types of localities that have found it more difficult to encourage employment growth in the private sector.’
The figures also showed a sharp increase of 89,000 in the number who had been unemployed for more than 12 months. Nigel Meager continued:
‘The number of people who have been unemployed for more than a year grew again, reaching 726,000, the highest figure since July 1997. Previous recessions left a devastating legacy of long-term worklessness in many communities and the real test for Government policy is now to ensure that these people do not become locked-in to longer-term unemployment and inactivity.’
Further information
Nigel Meager is a labour economist by training, and a well-established international expert on labour market and employment policy issues. Director of the Institute since 2004, he has a long and varied research track record covering the functioning of national, regional and local labour markets, unemployment, skill shortages, labour market flexibility, changing patterns of work and equal opportunity policies and practices.
For further information or comment, contact Nigel Meager or call , or the IES press office, or call 01273 763414.
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