Unemployment on the wane?

The UK job market showed signs of life in the first quarter of 2012, with unemployment falling by 45,000 compared with the previous year.

by Michael Northcott
Last Updated: 19 Aug 2013

Having just heard that the UK is back in recession and that the eurozone has only narrowly avoided it, many will be surprised to hear that there has been an improvement in the UK’s employment statistics. Unemployment fell 45,000 to 2.63 million between January and March this year compared with the same period in 2011, according to the latest report from the Office for National Statistics (ONS).

The number of people in employment rose 105,000, and the number of economically inactive people was down 35,000. Good news for the jobless and the economy. Of course, many will be wondering how our economic output could have contracted enough for a double-dip recession when we actually have more people in work than this time last year…

Well, a lot of the improvement can be put down to more people taking part-time work, as the ONS also found the number of part-timers who would like to find a full-time job is at around a fifth of those in work (18%). While the economy remains fragile and the eurozone’s situation remains unpredictable, taking on workers on a part-time basis will better suit some SMEs whose cash flows make it risky to take on a full-time recruit. 

The increase in part-timers is convenient for a government which needs some positive figures to pedal: in principle, it takes a million part-timers to deliver the same productivity as only half the number of full-time employees, but gosh, the employment figures look better, don’t they? 

To be fair, there are improvements in other important metrics. The outlook for the more than one million unemployed young people is looking up: numbers fell 17,000 to 1.02 million in Q1 compared with the previous year. Not a massive improvement, but that’s 17,000 off the dole, and paying much-needed tax, instead.

The figures aren’t going to precipitate another economic boom, but it’s the first bit of truly encouraging macro-economic news we’ve had in a while. Here’s hoping it’s a sign of firms enjoying a bit of hard-earned prosperity after the grind of recession years…

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