Published:

By Mark Wallace
Follow Mark on Twitter.

GROWTH
As with every month, the new labour market statistics paint a complex picture. Measures of employment, unemployment, long term unemployment and unemployment benefits have become decoupled from each other, essentially handing both the Government and the Opposition an opportunity to build their arguments on the gaps in between.

These complexities matter more now that the Bank of England is taking unemployment into account when setting interest rates (something we raised concerns about last week).

Broadly, the new figures from the ONS are positive news – at the very least, they don't show things getting worse. Here are the top lines:

  • Unemployment is down by 4,000 to 2.51 million. This is a rate of 7.8%, above Carney's guideline-not-a-target of 7%
  • The Job Seekers' Allowance claimant count is down 29,000 to 1.4 million
  • The number of people in work rose by 69,000 to a record 29.78 million. 307,000 more people are working than at the same time last year
  • Wage inflation was at 1.1% year on year, or 2.1% including bonuses

There are still underlying concerns, though:

  • Long-term unemployment rose by 10,000 to 474,000
  • Youth unemployment rose by 15,000 to 973,000
  • Average weekly earnings may be rising, but they are still outstripped by inflation

The big picture holds good news for all of us, and good news politically.

However, the Government must now help those who risk being left behind – the human and economic costs of long-term unemployment are huge, and the longer you are out of a job the harder it becomes to get back into work. The same goes for the psychological, social and financial impacts of youth unemployment.

Politically, Labour have been driven back from their preferred battleground. Ed Balls would love to be able to crow about rising unemployment, but he can't. Instead he will attack Osborne on the (perfectly valid) grounds of long-term and youth unemployment, as well as the decline in living standards caused by wages that grow slower than the rate of inflation. The Treasury's next focus must be to deny him those lines, too.

Comments are closed.