Although the number of unemployed people has risen again, the latest increase is the smallest for eighteen months, suggesting that the rate of job market decline may be slowing.

An increase of 30,000 during the three months to September took the unemployment total to 2.46m, with the jobless rate remaining at 7.8%.  The number of people in work actually increased for the first time since last summer, taking the total to 29m.

But the number of people out of work for more than twelve months has reached its highest level for twelve years, while youth unemployment has hit a record 19.8%, with one in five 16-24-year-olds out of work.

Describing the figures as "better than expected," Ross Walker, an economist at RBS Financial Markets, nevertheless added a note of caution.  "There is some evidence of stabilisation, but it remains to be seen just how durable this proves to be," he said.  "It feels too soon to expect any sustainable increase in total employment, and certainly the GDP data suggest that we should be, under normal circumstances, six or nine months away from that."

The CIPD remains similarly cautious.  "The fact that the unemployment total remained below 2.5m in the quarter ending in September is encouraging," commented chief economist John Philpott.  "However, the relative improvement should not be interpreted as evidence that the labour market is returning to health, with male unemployment and long-term unemployment now at a record rate despite a surge in the number of young people staying on in education to avoid the dole.

"Unemployment remained below 2.5 in the three months to September primarily because there was a rise in part-time employment, temporary employment and contract working, the latter boosting self-employment.  This more than offset a marked deterioration in full-time jobs for employees.  Such a pattern is common in a labour market where overall demand for staff is weak, the economic outlook uncertain and the road to recovery likely to be slow."

With opportunities for part-time employment increasing and full-time jobs continuing to be lost, the CIPD expects women to be the main beneficiaries.  It anticipates that the rate of male unemployment will rise to "well above 10%" in 2010, with the proportion of men in work falling to a record low.

Wednesday, 11 November 2009
 
Source R15