Disappointing rise in claimant unemployment
Disappointing rise in claimant unemployment and worryingly sharp drop in vacancies points to twin peaks jobs recession for UK
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):
Todays headline employment and unemployment figures may still look healthy but these include the tail end of the improvement in demand for labour witnessed in the spring and summer. Forward looking business surveys of employers hiring intentions indicate that this improvement was temporary and that conditions in the labour market are weakening, an emerging trend highlighted in todays official figures showing a further rise in the number of people unemployed and claiming Jobseekers Allowance (JSA) and a sharp drop in the number of job vacancies.
The rise in claimant unemployment of 5,300 in September is higher than expected and suggests an accelerating upward trend. Most disappointing is that the latest monthly increase is comprised of both more people joining the dole and fewer leaving. More worrying still is a sharp drop in vacancies in the three months ending in September. The number of vacancies is falling back to that last seen at the end of 2009, with a particularly marked fall in vacancies in public administration and education suggesting this years freeze on public sector recruitment is hitting public sector job prospects ahead of the major cuts due to be announced by the coalition government next week. The fact that job cuts in the public sector will tend to hit women harder than men may also explain why women account for most of the rise in claimant unemployment in September.
While headline unemployment seemed to have settled at a post-recession peak of just under 2.5 million in recent months, the deterioration in demand for labour signalled by the ongoing rise in claimant unemployment and the drop in job vacancies suggests that the headline jobless total will soon start to rise again. It looks as though the UK will experience a twin peaks jobs recession with the second peak higher than the first (closer to 2.9 million than 2.5 million). Indeed, this twin peaks effect is already emerging in the youth labour market which is showing signs of deterioration, with a renewed increase in the number of jobless 18-24 year olds.