Job figures ‘worst for a decade’

The latest set of official labour market figures published today by the Office for National Statistics (ONS) showed “the worst deterioration in the UK’s underlying job situation for at least a decade,” according to the Chartered Institute of Personnel and Development (CIPD). Chief Economist at the CIPD John Philpott, warned that the economy is increasingly likely to experience an avalanche of job losses in the coming months. “With horribly bitter timing this extremely weak set of job figures – which we expected but hoped not to see - has arrived in one of the gloomiest weeks of economic news for a long-time,” he said. “A significant drop in job vacancies and a sudden large jump in the vacancy rate underlies a fall in the number of people in work and surge in joblessness. There are not only more people unemployed and looking for jobs but also more economically inactive and outside the workforce. Most worrying of all, more of the jobless are suffering long-periods without work; a trend that looks set to worsen with the number of vacancies falling so sharply. Today’s bad jobs figures would not be the last Philpott warned; with business confidence diminishing it was becoming clear that more and more employers were readying themselves for further job cuts. This greatly increased the chances of what earlier in the year the CIPD warned might be an autumn and winter ‘avalanche’ of redundancies which would propel the unemployment rate back over 2 million in 2009 and leave more than 1 million in the queue for Jobseekers Allowance. Today’s official figures were 31.68 million UK workforce jobs in June 2008, up 26,000 over the quarter and up 142,000 on a year earlier. The sector showing the largest annual increase in jobs was education, health and public administration, which increased by 43,000. In the manufacturing industries, there were 2.87 million employee jobs in in the three months to July 2008, down 42,000 on the same period a year earlier. Across the wider economy, there has been a fall in both the number of people in employment and the employment rate. The number of unemployed people, the unemployment rate and the claimant count have all increased. The number of inactive people of working age has increased slightly but the inactivity rate is unchanged. The number of vacancies has fallen. Growth in average earnings including bonuses has increased but earnings growth is unchanged. In the latest reference period the working age employment rate was 74.7 per cent. The unemployment rate was 5.5 per cent, up 0.2 percentage points from the previous quarter. The number of unemployed people increased by 81,000 over the quarter.