Unemployment: A look behind the numbers

Two more pieces of economic news today, which will of course be spun like mad by the respective political camps.
You can’t shy away from unemployment however you look at it. A rise to 2.67 million unemployed, or 8.4 per cent of the working population is the highest it’s been for 16 years. As I’ve blogged before, the problem area surrounds youth unemployment, which accounts for 1.04 million of the total.
Beyond the weak economy, the issue there appears to be at least partly a mismatch between what students are coming out of schools and colleges with and what employers are looking for.
It’s worth mentioning that the youth unemployment figure doesn’t mean 1.04 million young people are walking the streets – the number includes more than 307,000 who are in full-time education but registered as looking for work.
Locally, unemployment in the East Midlands bobbed up only slightly to 188,000, or a below average rate of 8.2 per cent. All of these figures are for the three months period to the end of December.
The odd thing for some people will be that the number of people in employment has gone up at the same time as the jobless rate. That isn’t a contradiction – it tells you that the economy is creating jobs, but at a slower rate than the numbers of people registered as available for work. Many of the new opportunities are part-time, though.
Another important clarification here – the rise in the numbers unemployed includes people who have lost jobs and people who are new to the jobs market. So the unemployment issue isn’t a simple conflict between people finding jobs and losing jobs..
Either way, the economy isn’t creating enough new jobs at the moment. The second piece of news suggests that while the unemployment trend isn’t likely to significantly improve in the immediate future, it is unlikely to worsen.
The Bank of England said today that it did not think the UK had fallen into recession again, and that the economy would grow 1.2 per cent this year. It has reached that conclusion on the back of a series of industrial surveys that have pointed to a slightly improving picture for business.
The Bank’s Governor, Sir Mervyn King, isn’t for one moment suggesting that we’re out of the woods and says there may still be occasional dips in activity.
What can we conclude from all this? That there are opportunities for business growth out there, but an uncertain outlook means that cautious businesses will try to exploit them within the bounds of their existing resources.
Same old story, really, and however much the politicians argue about it, it is unlikely government intervention will make a substantial difference. Nevertheless, the rising jobless figure is putting subtle pressure on George Osborne to adopt a growth agenda in next month’s Budget.