UK jobs market: still no signs of real improvement

Press Releases

15 May 2013

Nigel Meager, Director of the Institute for Employment Studies, comments on today's ONS Labour Market Statistics:

‘Today’s data release from the Office of National Statistics once again contains very little in the way of good news on the jobs front.

‘Most headline indicators are worse than the previous quarter’s, although the changes in most cases are quite small. Looking over a slightly longer period, the labour market has been essentially flat for the last four years, and the latest figures suggest no likelihood of early improvement.

‘In particular, the total numbers in employment fell over the quarter (by 43,000), and the much-trumpeted jobs growth seen last year seems to have fizzled out, with employment falling for two successive quarters. Both unemployment and economic inactivity increased over the quarter, representing an increase of over 60,000 in people not in work.

‘It’s worth noting that unemployment, which surged by nearly a million at the beginning of the recession, has been stuck at or around the 2.52 million mark for just over four years now. Looking ahead, there are more public sector job losses in the pipeline as spending reductions continue to bite, so turning this poor unemployment performance around will depend almost entirely on job creation in the private sector. Unfortunatel,y the stagnant GDP figures do not provide much optimism on this front. Even when real output growth returns, it may take a while to feed through into significant creation of new jobs, because there are record levels of under-employment with large numbers of people in work willing, or even desperate, to increase their working hours.

‘Politicians and others keen to grasp at straws in the latest data may focus on the small fall in the unemployed claimant count (by 7,300), but it’s difficult to draw strong conclusions from this measure which has been heavily influenced by changes in benefit administration and eligibility conditions. Like the headline unemployment figure the claimant count has been essentially flat (at around 1.5 million) for over four years, and the latest small movements don’t change this picture.

‘The only real crumb of comfort is that recent months have shown a small but steady increase in job vacancies in the economy, and that trend continued in the most recent figures. The number of unemployed people chasing each vacancy now stands at 5.0, which is down from its peak of 5.8 in late 2011, but still far above its pre-recession levels of just over two unemployed per job vacancy, and there’s no evidence of it yet feeding through into a reduction in total unemployment.’


About IES

The Institute for Employment Studies is the UK’s leading independent, not-for-profit centre for research and evidence-based consultancy on employment, the labour market, and HR policy and practice.

About Nigel Meager

Nigel is a labour economist by training, and a well-established international expert on labour market and employment policy issues. He has worked at IES since 1984, following posts at the Universities of Bath and Glasgow. He has been 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.

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