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By Peter Hoskin
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The story on employment is
becoming familiar but far from tired. Like last
month
and the month before
that
and the month before
that
, the latest labour
market estimates
contain many encouraging findings:

  • Rising employment. In the three months to September, the employment
    rate was 71.3 per cent — an increase of 0.2 per cent on April-June. This
    translates to 29.58 million people in employment, which is over half-a-million
    more people in work than a year ago, and 100,000 more than the preceding
    three-month period.
  • Falling unemployment. The unemployment rate stands at 7.8 per
    cent, a 0.2 percentage point decrease on the three months to June.
  • Falling youth unemployment. In the last monthly figures, the unemployment
    level among those aged between 18 and 24 fell below one million. In today’s
    figures, it’s stayed there. Youth unemployment currently stands at 963,000, a
    decline of 49,000 on the three months to June.

Although there are same ol’ caveats
to be made:

  • Persistently high part-time employment. As I’ve mentioned, the number of people in
    employment rose by 100,000 in between April-June and July-September — but
    almost half of that increase (49,000) was accounted for by part-time work.
    There are now 8.12 million part-time workers, with 1.41 million of them working
    part-time because they couldn’t find the full-time work they wanted. Indeed, as
    this striking
    ONS graph
    suggests, much of the employment growth over the past few years
    has come in part-time jobs. This needn’t be a problem in itself, not least
    because part-time work can lead to further opportunities — but the Government
    will hope that those 1.41 million people find the full-time work they’re seeking
    as the economy picks up.
  • The squeeze on living standards. Average pay (excluding bonuses) rose by only
    1.9 per cent compared to the July-September period last year. This is, of course,
    significantly below the average inflation in prices over the same period.  By the Consumer Price Index, annual inflation
    stood at 2.7 per cent yesterday — and, as Andrew Lilico wrote, could well get
    worse. The cost of living

And some (relatively) new
caveats, too:

  • A rising claimant count. The number of people claiming Jobseeker’s
    Allowance rose by 10,100 to 1.58 million in October. This is the biggest
    increase in the past year, but it’s worth noting that the total is still lower (just)
    than last October’s 1.59 million. I plan to write a post on how the claimant
    count can stay more or less flat, while employment rises, in the
    not-too-distant.

And
then there’s perhaps the biggest caveat of all: the general economy is still in
a rather precarious position. Indeed, Mervyn King — launching the Bank of England’s latest
quarterly inflation report
 — has today said that economy could shrink in the
final quarter of this month. The report itself warns that “the
UK economy may be in a period of persistently low growth.”

Given the Bank’s shoddy
inflation forecasts, we might be tempted to dismiss such dire predictions, but I’d
say there’s actually a strong likelihood of these ones coming true. The situation
in America, with the on-going discussions to avoid
the fiscal cliff
, is cause enough for concern — and that’s even before we
consider the Eurozone and Britain’s own post-Olympics comedown.

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