UK unemployment: Jobs up, pay down

Job centre The good news on youth unemployment seems to be genuinely good

Jobs prospects for young people are starting to look a bit healthier - though the average pay packet is not. Those are two clear conclusions you can draw from the latest labour market statistics. The other parts of the story, whether it's joblessness or employment, are a bit murkier.

Take the murky stuff first: that 82,000 fall in the broader measure of unemployment certainly sounds good. In fact, it's the largest quarterly fall in more than a decade. But that headline change comes from comparing joblessness in the three months to October with the same figure for the three months to July.

If you compare this latest three-month figure with the one published last month (i.e. the three months to September), the number out of work has barely changed at all - in fact it has fallen by just 4,000.

You can say something similar about employment. It's impressive, to say the least, that there are now half a million more people in work than a year ago, with the creation of 600,000 jobs in the private sector more than offsetting the jobs lost in government. The trend, though, is a little discouraging: the 40,000 rise in employment in the three months to October is the smallest since the start of the year.

However, the good news on youth unemployment seems to be genuinely good.

As usual, there is a lot going on behind the 70,000 fall in the number of unemployed 18 to 24-year-olds. For example, I was initially worried to see that economic inactivity among that group, overall, had also risen in the three months to October, by 45,000, while employment had only risen by 11,000.

But when you dig deeper, you can see that the rise in so-called inactivity is more than accounted for by a rise in inactivity among 18 to 24-year-olds who are in full-time education. (The factor that always makes these numbers such a minefield.)

Employment among young people not in full-time education went up by 55,000 in those three months, while the number who were technically inactive actually fell slightly.

So, things seem to be getting better for young people looking for work who are not full-time students - or at least they are not getting worse.

Alas, the same cannot be said for average earnings, which have actually now fallen even further behind inflation in October with average annual growth of just 1.3% - less than half the rate of inflation.

Real earnings have now been falling since the summer of 2010. This was supposed to be the year when the squeeze would ease. But we're running out of time for that particular new year prediction to come true.

Stephanie Flanders Article written by Stephanie Flanders Stephanie Flanders Former economics editor

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  • rate this

    Comment number 26.

    It will be a long hard struggle but getting people in jobs is a start.

    When Billions of Chinese, Indians and Koreans start exporting stuff to us, spiced with Russian and Arab control of natural resources, our Western 'civilised' economic model is going to be blown out of the water and it has been!

    Sure, the *ankers and Blair/Brown share responsibility but our expectations must be rebased now.

  • rate this

    Comment number 25.

    A small step in the right direction, particularly the continued shrinking of the state behemoth towards a more growth-supporting private sector. More of the same please.

  • rate this

    Comment number 24.

    I'm from Liverpool the jobs market is appalling the vast majority of the jobs available won't cover the rent usually zero hours contracts so difficult to take a second part time job because your hours are given to you at the end of the previous week. Those who are saying poor paid jobs are better than no jobs are not living the reality.

  • rate this

    Comment number 23.

    "You only have to look at what is happening in Wisconsin and Michigan to see what the Super rich would like to do."

    I agree on the outcomes (McJobs) but not on the reasons. It seems to me that demagogues like Obama & Biden have conned the masses into believing their rhetoric that the rich destroy jobs. More likely bad govt, like the current US regime, is creating McJobs.

  • rate this

    Comment number 22.

    I work part time but i would love to work a full week. As for the figures they have been massaged by DWP it should count in those who have had their JSA suspended. Im afraid Cameron and Clegg are pitting the middle class and poor against each other while we race to the bottom allowing those at the top to cross the finishing line and get richer.

  • rate this

    Comment number 21.

    All thanks to BoE that supposingly care about inflation.

    Suspect with the Canadian Governor inflation probably will go even worse...

    We should probably rename the MPC to HPC (Houses Prices Commitee) since that is the only thing they care about.

    As long as persistent high inflation is reducing our income, there will be no growth.

  • rate this

    Comment number 20.

    Some Lingering Fog
    1 Hour ago

    Is it better to have everyone in work but on lower wages rather than see the majority employed on higher wages and the rest on out of work benefits?


    For mental health benefits i`m sure that`s the case but financially i`m not so convinced. A lot of lower wage earners get working tax credits which cost the taxpayer £25 billion a year.

  • rate this

    Comment number 19.

    DavidinUSA @10

    Spot on.

    You only have to look at what is happening in Wisconsin and Michigan to see what the Super rich would like to do.

    The Republican Governors in those states are bending over backwards to accommodate the multi Billionaires who bankrolled them with their "right to work" mumbo jumbo.

    We are not quite as blatant in the UK at the moment but we are getting there.

  • rate this

    Comment number 18.

    The problem economists have at the moment is to explain why our unemployment numbers in the main are in decline whereas in Europe they are rising. In the circumstances we should at least be cheerful for the fact more people are finding part or full time work. This is the beginning we hope of a steady improvement in the state of our economy, despite the depressing economic news from the Eurozone.

  • rate this

    Comment number 17.

    ten more years of moderate conservatism and we might once again have a country worth living in - i see they have ,massivly reduced immigration figures too

    imagine what will happen though if milliband and balls are let loose - a nightmare not worth thinking about

  • rate this

    Comment number 16.

    Its called mopping up after the nasty evil Labour party.

    Labour used mass immigration as a political weapon against mainly English workers as is blatant race discrimination & requires an equality impact assessment to assess the damage.

    Labour breached the EU HRA by using mass mmigraion as a political weapon just as they broke international law with the hell unleashed on the people of Iraq

  • rate this

    Comment number 15.

    So would you conclude that people are pricing themselves back into work?
    It goes a bit against Keynesian theories but that seems to be where you are heading towards.

  • rate this

    Comment number 14.

    'Real earnings have now been falling since the summer of 2010.'

    Any stick to beat the Tories with is a good stick eh Steph?

  • rate this

    Comment number 13.

    I strongly suspect that if labour had managed to get these figures our steph would have been in raptures

    Instead we have yet more doom and gloom, its almost as if she wants the coalition to fail

  • rate this

    Comment number 12.

    The headline employment figures are never that revealing but currently even less revealing than usual. While ant fall in unemployment is better than an increase, the fact that there is poor correlation between the unemployment figures & other economic measures sets some alarm bells ringing. In a real recovery you expect most the numbers to move together rather than in different directions

  • rate this

    Comment number 11.

    Lies,damned lies and statistics.Now where have I heard that before?

    Good jobs replaced by low paid part time work.

    Wages driven down by private sector employers who are more than aware that they have workers over a barrell.

    A Government hellbent on de-regulating everything.

    Welcome to Victorian Britain Mk2

  • rate this

    Comment number 10.

    Stephanie, this is not the end of a cycle, but a major readjustment of the economy.

    Jobs may be more plentiful but they tend to be low-paid with little security. They're McJobs.

    It's part of the hollowing out of the mdidle classes & the impoverishment of society. The US & UK are drifting towards a Latin American model with a tiny wealthy elite, a tiny middle class, and masses of poor.

  • rate this

    Comment number 9.

    If 200,000 jobs for school leavers had been created this year and 190,000 of them had been trainee positions in the trades or professions, then we'd all be right to feel optimistic.
    If however, 190,000 had been created by supermarkets to serve as checkout staff or to collect trolleys then we'd be right to shake our heads.

    A dual measure for quantity and quality of jobs created would help.

  • rate this

    Comment number 8.

    @4 Ed
    I hope that will be the case but Steffie has made a lot above out of - in effect - one months figures.

    Interestingly, no prior year or prior decade(s) comparisons are included.

    We have a very long way to go; various cuts, tax & benefits changes have yet to really bite. And as economies react faster these days, we don't know what EU or worldwide shocks may hit in the next few months.

  • rate this

    Comment number 7.

    Great news, but as long as real wage packets are falling, which shows no sign of happening (see recent beeb story on lowering police starting salary for example) then we will not see anything resembling growth for the foreseeable.

    In truth, BAU since 2010 and not likely to change anytime soon. This stat means very little, but the politicians will hail it as a massive win, which is a little sad


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