Welcome fall in unemployment, but questions remain about sustainability of recovery

Press Releases

16 May 2012

Nigel Meager, Director of the Institute for Employment Studies commented on today's jobs figures from the Office of National Statistics:

‘The data include some further welcome developments, with another fall in the overall headline unemployment figure, and the number of people claiming Jobseekers' allowance is also down.

‘Employment was up by 105,000, but it is notable that most of this increase was due to people working part-time on a self-employed basis. While the number of employees is still nearly 200,000 below its level of only a year ago, self-employment continues to grow strongly and is at its highest level for several decades, the growth being dominated by part-timers.

‘Optimists might claim that this is the early stage of a real recovery, with entrepreneurial start-ups leading the way. Several factors suggest caution in interpreting these data, however. The macro-economy continues to stagnate and employers remain very cautious in hiring, with vacancies at an historically low level and falling again this month. Further, the bulk of the public spending cuts are still to take effect. All this suggests a more pessimistic interpretation of the latest data, which may simply reflect growing numbers of people taking small chunks of freelance or casual work because they are unable to find more secure employment. Until GDP growth resumes to its pre-recession path, and businesses are sufficiently confident to start hiring extra employees in significant numbers, it is too soon to talk of a sustainable jobs recovery.’