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ONS Unemployment Statistics Comment

Phil Sheridan, Managing Director, Robert Half UK, comments: “This is the fourth consecutive month that we have seen positive gains in the employment market, with unemployment down 0.1% to 7.7% this quarter. The statistics also indicate that the private sector has been successful in offsetting many of the government job losses as many industries again turn their attention to growth.  However, the increase in the number of people working part-time because they have been unable to find full-time jobs is a cause of some concern, although this can often provide a bridge to full-time employment.”

According to the Robert Half Professional Hiring Index (& lsquo;Professional Hiring Index’), 87% of UK executives surveyed are confident in their company’s prospects for growth in the second half of the year and a net 11% will be adding additional permanent staff to help manage business growth and rising workloads.

Another positive trend of today’s ONS report is the job gains made amongst the younger workforce, aged 16-24, where the number of unemployed dropped by 42,000. This is a positive sign for recent graduates who are looking to get their foot on the career ladder as well as for the general economy, which needs a strong workforce for the years to come.”

Sheridancontinues, “Despite speculation that job growth is partly offset by companies decreasing salaries, so called & lsquo;down-banding’, our Professional Hiring Index also identified that only 8% of UK organisations will be decreasing salaries in the second half of the year, and only 11% within the public sector. In contrast, nearly one in four (24%) executives plan to increase salaries, including 13% of hiring managers within the public sector.”


*   Unemployment in three months to May fell by 26,000 to 2.45m employment increased by 50,000

Commenting on the labour market statistics published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce, (BCC), said:

"These figures are positive overall, with a rise in employment and a fall in unemployment in the last three months. There was also an encouraging de cline in unemployment among young people. However, there are some causes f or concern. The number of economically inactive people rose by 32,000, and those working part-time because they could not find a full-time job rose to a record high.

"The private sector is willing and able to create jobs, but we must not be complacent. It is likely we will see more public sector job cuts in the coming months, and we are expecting unemployment to increase by 150,000 to a peak of 2.6m over the next 12 to 15 months.

"Given this background, the government must empower the private sector to create jobs by reducing the burden of regulation, particularly on smaller firms. Although the new figures show a marginal increase in earnings growth, wage pressures remain muted and are still well below inflation. Following yesterday's surprising fall in inflation, this should encourage the MPC to delay interest rate increases until the recovery is more secure. The priority must be to support the recovery and avoid a setback while the government implements measures to reduce the deficit."


REC comment on latest jobless figures

Fall in jobless numbers, especially among young people, a positive trend says REC

The latest unemployment figures, published today by the Office for National Statistics has shown another fall in the total number of people out of work in the three months up until May. This fell by 26,000 to 2.45 million with the total of young unemployed people aged between 16 and 24 dropping by 42,000 over the quarter to 917,000.

Commenting on the latest jobs figures, Tom Hadley, the REC Director of Policy and Professional Services says:

"The fall in the number of unemployed is good news, the UK jobs market is on a slow road back to recovery. The positive trend in youth unemployment is particularly welcome and is something that the UK's  business community can accelerate by helping to build better bridges into the world of work.

"The REC's own data shows that demand for staff has increased continuously for the last 23 months, although the rate of growth has slowed over the last two months. Other forward looking research shows that a high proportion of employers are planning to increase hiring activity over the coming year which makes us optimistic that the private sector will be able to absorb additional public sector jobs cuts.

"In the short-term, employers remain relatively cautious with the recruitment of new staff seen as a risk. However, there is also a risk in not recruiting. Employers need to bring in staff who can drive the business forward and avoid existing staff having to carry an unsustainable workload.

"The other short-term challenge is that certain categories of job-seekers are not getting the support and guidance the need in a competitive jobs market  - in particular those not catered for under the Government's work programme such as high-end professionals, recent graduates and workers looking to make the transition from public to private sector.”



No real labour market recovery yet

The labour market figures released by the Office for National Statistics today still leave us with some major concerns about the extent and nature of the & lsquo;recovery’ in the labour market.

While some figures suggest slight improvements&hellip.

&brvbar  The headline unemployment figure from the Labour Force Survey recorded a small fall of 26,000 over the quarter to May, leaving total unemployment still at 2.45 million.

&brvbar  Total employment grew by 50,000 in the quarter to May,

Others are much less positive&hellip.

&brvbar  The more recent monthly claimant count figure for unemployment, recording the number of people claiming Jobseekers’ Allowance, increased by nearly 25,000 in June, and has now broken through the 1.5 million mark again (the earlier figure for May has also been revised upwards).

&brvbar  The total number of job vacancies fell again by 26,000 in the 3 months to June. The current total of 456,000 unfilled vacancies in the economy is now back close to its recessionary low point in 2009. The number of redundancies was also up in the last quarter. These figures suggest that underlying labour demand may be falling again and could feed through into unemployment in the coming months.

&brvbar  Despite the increase in the overall numbers employed, the total number of weekly hours worked in the economy fell back by 18.6m in the quarter to June. Total hours worked are now almost back to the levels recorded in late 2009 and early 2010.

Nigel Meager, Director of the Institute for Employment Studies comments:

“Recent employment and economic data have left many commentators somewhat perplexed. In particular, the apparently strong employment performance has been difficult to square with the weak figures for GDP growth.

“Some have suggested that the GDP figures are wrong, and will need to be revised upwards. Others have pointed out that the headline employment data may be concealing underlying weaknesses in labour demand, as suggested by some of the other indicators. In particular, claimant unemployment has been rising again, and the total number of hours worked in the economy has actually been falling, even while total employment has grown, partly because of a shift from full-time to part-time work.

“Special factors may have influenced both of these developments, with the claimant count increase partly due to benefit rule changes for single parents, and the working hours reductions possibly influenced by an extra bank holiday. But overall, these figures certainly do not suggest a labour market in robust health, particularly given that the level of vacancies is down again, and the number of redundancies up on the previous quarter.

“It’s worth remembering that employment didn’t fall nearly as much as expected in the recession, partly because businesses retained staff through short-time working, wage cuts and other mechanisms. The other side of this coin, however, is that many employers now have the staffing  capacity to respond when the economy returns to growth, without hiring new people. Given that growth itself is fairly weak, it’s unsurprising that the overall labour market remains in an anaemic state, as confirmed by these figures.

“The coming months could be increasingly difficult for the UK labour market, as public sector job cuts begin to bite. The government’s just-launched Work Programme could find itself running hard to stand still, as its long-term unemployed and disabled clients find themselves at the back of the queue for a dwindling pool of vacancies. The challenge will be particularly acute in regions (the North East, South Wales, the West of Scotland, for example) which are both heavily dependent on public sector employment, and have large concentrations of benefit claimants.”


Female unemployment highest for 15 years

Responding to today’s unemployment figures, the Chief Economist at the Institute for Public Policy Research (ippr) says “female unemployment is likely to remain gloomy for some time”.

IPPR Chief Economist, Tony Dolphin said:

“Claimant count for women has now reached 493,900 – 76,900 higher than a year ago and its highest level for almost 15 years. The claimant count for men has fallen by 26,000 over the same period.

“In the recession, unemployment among men increased much more than unemployment among women. The fact that this experience is now being reversed is probably due in large part to the government’s public spending cuts. Over the last year, employment in the private sector has increased by 520,000, while employment in the public sector is down by 143.000. Public administration, health and education is the only broad sector of the economy where more women than men are employed.

“With the government planning to implement more cuts in the public sector workforce over the next few years, the outlook for female unemployment is likely to remain gloomy for some time.”



The CBI today commented on the latest unemployment figures, showing a fall to 2.45 million in the three months to May.

Neil Carberry, CBI Director for Employment, said:

“This month’s figures show that the slow economic recovery is continuing to create jobs, as unemployment has fallen over the last quarter. The data does suggest that job creation in the second quarter was slightly weaker than in the first, which again emphasises that private sector growth must be the Government’s priority.

“At the same time, the data shows that pay remains restrained and working time is shorter than normal, as employees and employers work together to weather these challenging times.

“Addressing long-term unemployment remains a pressing issue, which requires us to tackle underlying structural issues, especially on skills and welfare reform.”



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