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ONS Data Gives Some Cause For Optimism

ONS Data Gives Some Cause For Optimism

The key points from yesterdays ONS Employment Numbers – followed by industry comment:

The employment rate for those aged from 16 to 64 was 70.6 per cent, up 0.3 on the quarter.

There were 29.28 million people in employment aged 16 and over, up 166,000 on the quarter. The number of people employed in the private sector increased by 205,000 to reach 23.38 million but the number of people employed in the public sector fell by 39,000 to reach 5.90 million, the lowest figure since March 2003.

The unemployment rate was 8.2 per cent of the economically active population, down 0.2 on the quarter. There were 2.61 million unemployed people, down 51,000 on the quarter.

The inactivity rate for those aged from 16 to 64 was 23.0 per cent, down 0.2 on the quarter. There were 9.23 million economically inactive people aged from 16 to 64, down 69,000 on the quarter.

Total pay (including bonuses) rose by 1.4 per cent on a year earlier, up 0.5 on the three months to March 2012. Regular pay (excluding bonuses) rose by 1.8 per cent on a year earlier, up 0.2 on the three months to March 2012.


Private sector employment growth five times faster than public sector job losses

The CBI today commented on the latest official labour market data, showing that unemployment fell by 51,000 and employment rose by 166,000 in the three months to April. The number of people employed in the private sector increased by 205,000 in the first quarter of this year, outstripping public sector job losses of 39,000.

Neil Carberry, CBI Director for Employment and Skills, said:

“Today’s fall in overall unemployment numbers offers cause for some optimism, despite the on-going risk presented by events in the Eurozone. The most pleasing aspect is the strong growth in private sector employment in the first quarter of the year, with businesses taking on over two-hundred thousand extra staff – five times as many people as lost their jobs in the public sector.

“It’s particularly encouraging to see the number of people in full-time work rising too, by 82,000 in the three months to April. This is the first time in nine months we’ve seen rising full-time employment.

“Long-term unemployment remains troubling, however, with a rise of 3.6% in those unemployed for over a year. There is a pressing need for the Government’s Work Programme to deliver and stop people drifting into inactivity.”

Kevin Green, chief executive of the Recruitment & Employment Confederation, says:

“Today’s figures are absolutely good news – but we need to be cautious. Our data shows that while the labour market is still growing, growth is slowing down and ultimately things are likely to get worse before we see them get consistently better.

“It’s good to see growth in part-time work and self-employment. Flexible working is a definite trend for the UK labour market going forward as more people look for different ways to work that suit their lives.

“What’s really lacking is quality advice and support for people who are looking to re-enter the labour market, such as people with disabilities, mothers returning to work and young people. In this competitive environment, jobseekers looking to re-engage with the workforce need proper advice and guidance and Jobcentre Plus isn’t providing that.

“Despite the dip this month, the number of young people out of work is still worrying, especially as we’re about to see more school leavers and graduates entering the labour market in the next few months.”

NOTE - The REC’s Flexible Work Commission will be publishing a report in the autumn which will focus on flexible working options for employers and workers in more detail.


Following the decrease in unemployment, as released by the ONS this morning, Gagandeep Prasad, Associate at Charles Russell LLP, commented:

“While a further decrease in unemployment should obviously be welcomed, a healthy scepticism is to be encouraged, as it is important to consider these figures in context. In the face of significant international uncertainty, employers remain hesitant about taking on new staff, pay rises lag well behind inflation and employees continue to work longer hours to protect their jobs. Today’s figures unfortunately cannot distract attention from the general feelings of uncertainty within the economy and the substantial under-employment, as reports are received of those without work are taking on part-time odd jobs in order to make ends meet.”

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

“This is encouraging news at a crucial time for the UK economy. Although the level of youth unemployment remains high, overall these figures show a flexible and robust job market. This proves that the private sector is willing and able to create new jobs while public sector employment continues to shrink. The figures also highlight a contrast between growth in jobs and declines in GDP reported by the ONS, although we still expect some upward revision in the output figures.

“We should be encouraged by these figures, but uncertainty still lies ahead. Continued difficulties in the eurozone create challenges for our exporters at a time when domestic demand is under pressure. Further net increases in unemployment are still likely over the next year, but the peak will probably be lower than the 2.9m figure predicted in our latest forecast. Businesses are keen to grow and invest, but the government needs to do more to help them create jobs. More forceful deregulation, stronger incentives for employment, and a business bank to improve access to finance would enable more firms to hire with confidence and drive growth.”

Gerwyn Davies, Labour Market Policy Adviser at the Chartered Institute of Personnel and Development, said: “The fall in unemployment and increase in private sector employment revealed in today’s official statistics is welcome, and reflects the immediate-term increase in optimism amongst private sector employers we’ve seen in our most recent Labour Market Outlook. However, closer analysis of the figures finds a sharp rise in self-employment more than accounting for the small fall in unemployment. A rise in self-employment may, in itself, be a good thing, however previous analysis from the CIPD* found that the recent rise was less a sign of a resurgent enterprise culture, and more evidence of a growing army of part-time & lsquo;odd jobbers’ desperate to avoid unemployment.”


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