More grim unemployment figures out today: another 232,000 people lost their jobs in the three months to April, according to the Office of National Statistics, taking the total to 2.26m. That means the overall unemployment rate is now at 7.2%, a 12-year high. Painful reading for the Government, given that this coincides rather neatly with Labour’s time in power – particularly since the total is expected to top 3m next year, increasing the pressure on the public purse. On the other hand, glass-half-full types will note that the claimant count didn’t jump as much as expected…
Admittedly, the jump in the overall unemployment rate – from December’s figure of 6.3% - was fairly pronounced (the second biggest since 1981, to be precise). And the redundancy figures were a little scary: over 300,000 people were made redundant in the three months to April, with manufacturing and leisure among the worst affected sectors – that's the highest total since the ONS started tracking it in 1995. Unemployment is famously a lagging indicator of the state of the market, so it’s not surprising that these numbers are rising even at a time when the economy as a whole appears to be stabilising (or at least, getting worse less quickly).
One relatively positive sign, however, was that the claimant count (i.e. those getting Jobseeker’s Allowance) ‘only’ rose by 39,300 in May, to 1.54m. That might sound like a lot, but it’s much less than the 60,000 City analysts were expecting, and it’s also noticeably down on the near-50,000 rise in April. That does suggest that although the labour market is clearly still in a shocking state, it may be starting to stabilise. In fact, with the overall jobless count also a bit lower than expected, some economists are now slightly less pessimistic about how bad things will get – the consensus is still that we’ll end up with more than 3m employed, but only just.
However, that still means that even in a best-case scenario, another three-quarters of a million people are likely to lose their jobs in the next year. That’s a frightening statistic, particularly since it will probably be young people who bear the brunt of this (the number of 18-24 year olds in work fell by over 6%, compared to 2% for the adult population as a whole). And of course it’s bad news for our chances of economic recovery, since it’ll reduce consumer spending and force the Government into spending cuts to cover the increased welfare bill. So businesses clearly have more pain to come.
Sorry - we'd like put a more cheerful spin on this, but we're struggling to see one...
In today's bulletin:
UK unemployment hits 12-year high
Sainsbury's gets aggressive after latest sales boost
British Airways boss Walsh ask staff to work for free
'Bloated' MySpace to lay off 400 staff
Editor's blog: The abuse of power