Pick-up in job market adds to recovery hopes

A flurry of positive economic indicators - even in the job market - prompts more talk of green shoots.

Last Updated: 31 Aug 2010

The job market actually picked up in August, according to new data from the Recruitment and Employment Confederation – the first time this has happened in 17 months, and the first bit of positive news on the subject for what seems like an awfully long time. In fact, there’s a lot of optimism around this morning: the National Institute of Economic and Social Research says that UK output actually grew in the last three months (albeit by a mere 0.2%, but every little helps, right?), while the Nationwide reported a one-year high in consumer confidence (as shown in the results of some unlikely retailers). So a good day for dedicated green-shoot watchers – but will it be a false dawn?

According to the REC, the job market is looking a teensy bit healthier. Its research found small increases in both permanent and temporary appointments in August – the first rise on the permanent side for 17 months, and on the temp side since July 2008. OK, so the REC admitted that vacancies were still falling – but at a slower pace than at any time in the past year, which can only be a good thing. The research had some good news on pay packets too: pay is now falling at its slowest rate in 10 months.

Optimists will also point to some of the big corporates who have been persuaded to weigh into the jobs battle. For instance, this morning software giant Microsoft launched its ‘Britain Works’ campaign – which will supposedly get 500,000 people back into work by 2012 ‘through a combination of a new national apprenticeship scheme, targeted skills and employability training and a new job matching service’. (If you’re thinking this sounds a bit ambitious, we should point out that much of this will actually be delivered via Microsoft’s partners in the public and private sectors – so it’s really facilitating the process, as opposed to creating all these jobs directly).

And there are some positive signs elsewhere. The NIESR reckons output is on the rise again after more than a year of recession, while Nationwide’s consumer confidence index hit its highest level since August 2008. This is reflected in some surprising retail results this morning: Mike Ashley’s Sports Direct actually upgraded its profit forecast, while House of Fraser said sales had risen in the last three months. If high street laggards like these are back in the pink, things must be looking up.

However, much though we hate to pour cold water on all this, the NIESR also warned that we’re likely to see a period of stagnation, with output bouncing up and down. And with companies still looking to cut costs or consolidate, it’s hard to see the unemployment figure going anywhere but up. So while today’s figures show that the UK economy is off life-support, perhaps it’s best to leave the bubbly on ice for a while yet.

In today's bulletin:

Pick-up in job market adds to recovery hopes
McLaren gambles by branching out into road cars
Dresdner traders demand £30m in bonuses
Editor's blog: Putting the squeeze on the booze industry
Late payers get creative with the truth

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