Jobless count hits 14-year high - but is the rot slowing?

Unemployment jumped to 2.47m in the three months to July, but redundancies were down slightly.

by
Last Updated: 31 Aug 2010

Another month, another grim set of unemployment figures: the jobless count increased by a further 210,000 to 2.47m in the three months to July, which means that almost 8% of the working population are now without a job. That's the highest level since 1995, and shows that the UK is still going to be feeling the pain for a while yet, regardless of whether or not we’re technically out of recession yet. But although nearly 250,000 people were made redundant during the period, a shocking statistic by any standards, glass-half-full types will note that this is well down on the 302,000 redundancies in the previous quarter. Small mercies, and all that…

The rise in the unemployment figure is no surprise, of course. The economy might be pulling out of recession, but the jobless figure is always a lagging indicator, as they say - cutting staff will often be a last resort for struggling firms. But that shouldn't obscure just how bad these numbers are: unemployment's already at a fourteen-year high, and with most commentators predicting that it will top 3m as the recession continues to take its toll, there's clearly worse to come.

Once again, today's figures show that the recession is proving particularly devastating for young people. About 947,000 16-24 year-olds are now without a job – a jobless rate of nearly 20%. Having one in five young people out of work is bad news whichever way you look at it - missing out on the first step of the career ladder could damage their professional prospects for years to come, while it's bound to lead to all kinds of concomitant social problems.

Another recurring theme is the continuing discrepancy between the total jobless count and the number of people actually claiming unemployment benefit, which (as expected) grew by 24,000 to 1.61m during the quarter. We know there are various reasons for this - some people are on the sick, some can't claim immediately, some are living off partners, and so on - but frankly the sheer size of the discrepancy makes very little sense to us.

The only (slightly) positive sign was that fall in the number of redundancies. But generally speaking, things are clearly going to get worse before they get better. Sages like Bank of England Governor Mervyn King (although his former colleague David Blanchflower might disagree with that description) are predicting that any recovery will be slow and protracted, which means the economy is unlikely to be strong enough to create net jobs for a while yet. So expect these indicators to keep ticking upwards for a while yet.


In today's bulletin:

Jobless count hits 14-year high - but is the rot slowing?
Could Lloyds be forced to give up Halifax?
Facebook in 'actually making money' shock
Next: It's a recession, not Armageddon
Dads to get more paternity leave (maybe)

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