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Latest ONS Unemployment Figures

Latest ONS Unemployment Figures
Public sector cuts cast shadow over jobs market
The threat of major public sector cuts has knocked employers confidence, a report from Recruitment and Employment Confederation is expected to reveal.
The RECs monthly JobsOutlook survey due to be published later this week highlights the first signs of increased uncertainty in employers hiring intentions following the announcement of the coalition Governments austerity drive. The easing in confidence has hit the short term demand for temporary and contract staff which had been building in recent months.
Nearly one in five (18 per cent) of employers surveyed said their short-term use of contingent labour would increase in the next quarter, compared to 23 per cent last month. Demand for permanent hire over the same period has remained static with 14 per cent of employers predicting growth.
The longer term outlook for both temporary and permanent staffing is stronger. Both workforces are set to show net gains over the next 12 months.
Commenting on the JobsOutlook findings, Roger Tweedy, the REC's Director of Research, said: The uncertainty of the wider global economic situation and the contents of the much anticipated emergency budget have made it difficult for employers to be more positive about their hiring intentions at this stage. The longer term trends are encouraging but we may now have to wait until the autumn for further positive momentum to return to the labour market.
As public spending cuts begin in earnest, we believe flexible temporary and interim staffing will be essential to the ultimate re-engineering of the sector. At the same time, the private sector will increase its reliance on the same resource to cushion it from continued economic uncertainty and to access rare skills.
We will be using the JobsOutlook survey to monitor the impact of budget cuts to both the public and private sector. Currently 17 per cent of public sector organisations think the cuts will have a very serious impact.
Official figures show UK jobs market much perkier but still far from in the pink
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) which update the Labour Force Survey measures of employment, unemployment and economic inactivity to the quarterly period March-May 2010, the count of people unemployed and claiming Jobseekers Allowance to June 2010, and average weekly earnings for May 2010:
This is easily the best set of official labour market figures since the start of the jobs recession two years ago, with a sharp quarterly rise in the number of people in work and fewer economically inactive, as well as a welcome drop in both headline unemployment and the jobseekers allowance claimant count. But while the jobs market was clearly much perkier in the spring quarter, with close to 2.5 million people unemployed it is still far from in the pink. And with a big public sector jobs squeeze already underway and the pace of economic recovery uncertain, things may look a lot less rosy by spring 2011 than they do at present. Todays good news may simply be the calm before the storm.
A spring 2010 pick-up in employment comes as no surprise to the CIPD, since this is what our own surveys of employers hiring intentions had shown. Worryingly, however, more recent employer surveys suggest the pace of jobs recovery has slowed since the spring, placing a question mark over whether the private sector will in the short-run generate enough jobs to offset mounting public sector job cuts.
Moreover, while the jobs market improved in the spring all the net new jobs being created were either part-time, temp positions or filled by the self-employed. The number of full-time employees continued to fall while the number of people working part-time because they could not find a full-time job further increased to reach 1.06 million.
The most positive feature of the latest employment figures is an indication that conditions in the youth jobs market have at the very least stopped getting worse and may be starting to improve. What is unclear is the degree to which this reflects the impact of policy measures taken by the former Labour government, which are now being withdrawn by the Conservative-Lib Dem coalition. This makes it imperative that the coalition gets its planned Work Programme up and running as soon as possible.
Reaction from Badenoch & Clark
In reaction to the latest unemployment statistics released today by the Office for National Statistics, Lynne Hardman, Managing Director at specialist recruitment consultancy Badenoch & Clark, comments:
It is clearly a positive sign to see unemployment come down at a rate of 7.9 per cent, particularly as this is the fifth month in a row and reflects the general improved health of the job market.
Over the past few months we have seen a steady increase in recruitment activity across various sectors but employers remain cautious in their approach to recruitment. Equally, there are still people in part time or temporary positions who would prefer to be working permanently or full time. There are also cases of people taking positions for which they are over qualified.
We remain concerned that the impact of the emergency budget and the promised public sector cuts is yet to be felt. Only time will tell whether private sector growth will be able to absorb the job losses expected in the public sector.


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