13/07/2011
Rise in redundancies, fall in vacancies and more claiming Jobseeker's Allowance signals start of renewed labour market downturn
Dr John Philpott,
Chief Economic Adviser at the Chartered Institute of Personnel and Development
(CIPD) comments as follows on official labour market statistics published
earlier today by the Office for National Statistics (ONS):
"Today's figures suggest that conditions in the labour market are weaker
than earlier in the year. The headline improvement in employment and
unemployment is relatively small and with vacancies continuing to fall and
redundancies now starting to increase as public sector cutbacks begin to bite
it's clear that the underlying jobs situation is deteriorating. The number of
unemployed people chasing each job vacancy is back to where it was in the dark
days of the recession in the spring of 2009. And while the sharp rise in
Jobseeker's Allowance (JSA) claims is in part due to people previously on other
welfare benefits being moved on to JSA, at least half of the latest monthly
increase is likely to reflect weaker market conditions.
"The welcome fall in youth unemployment should not be exaggerated. This is
almost entirely due to more 16-24 year olds turning to full-time education as
an alternative to joblessness. There was barely any quarterly increase in the
number of young people in work.
"The labour market is on the turn, with unemployment on the headline
measure as well as the claimant measure set to increase. All that remains to be
seen is how bad things get. Continued slow wage growth may help dampen the rise
in unemployment but either way the pain hitting the UK workforce will be severe
for some considerable time yet."