Thursday, 19 January 2012

January 2012 Labour Market Statistics Briefing

On the 18th of January, the Office for National Statistics published the Labour Market Statistics for January 2012, which covers Labour Force Survey data for the period September-November 2011 and data on Jobseekers’ Allowance claimants for December 2011.  This data indicated a further fall in the employment rate and a higher than expected increase in unemployment, with the number of people estimated to be unemployed reaching 2.7 million adults – up 118,000 on the previous quarter - the highest number since 1994. 

In the national news there was considerable emphasis on the continued increase in the unemployment of young people, aged 16-24, which has increased by 52,000 on the previous quarter to 1.04 million, with sources such as the BBC, Guardian and Channel 4 News speculating about a ‘lost generation’ – unemployed young people who have never had experience of paid work, and will therefore face increasing barriers accessing work in the future.   In responses from the Government (e.g. employment minister Chris Grayling MP) and from some media commentators (e.g. Channel 4 News’ economics editor, Faisal Islam) there was also optimistic speculation that, because month-on-month increases in the claimant count appears to be slowing, this may point to future improvement in the wider quarterly labour market statistics – and that the ‘end may be in sight’ for the current trend of worsening employment conditions.  Unfortunately, it is our view that such optimism may be premature – given corresponding monthly indicators of demand for labour, such as vacancies, continue to worsen.  Vacancies advertised in Jobcentres in the three months to December 2011 down 2,000 on the previous quarter and 18,000 on the year.  This is also in-line with a range of concerning business survey reports, showing subdued business activity, confidence and consumer spending.

More locally, BBC East Midlands today presented the fall in employment and rise in unemployment as an unexpected end to the region ’bucking the trend’ – citing previous Labour Market Statistics releases that suggested that conditions in the East Midlands had been more stable than nationally, even with some indication of increases in employment in previous quarters.  Again, our view is unfortunately somewhat less positive.  The more reliable 12-month-rolling Labour Force Survey results (which are published for the East Midlands 4 times a year, each containing 12 months’ worth of data) suggest that the East Midlands did not experience a comparable level of recovery in terms of employment and unemployment through 2010 compared to the national picture -  so the region’s relative stability through 2011 (up until the latest release) has to be seen in the light of weaker performance in the previous year.

Source: ONS Crown Copyright, 'Labour Market Statistics: January 2012', Statistical Bulletin, 18th January 2012.

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