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 46.

    odd how many on here said labours problems were due to global problems, but the coalitions success while those global problems are still apparent gets hammered in a way that labour never

  • rate this

    Comment number 45.

    #37 beat me to it. One has to define 'Job' ....supermarkets are always announcing 300 more jobs but I always assume if one person is doing 2 afternoons a week then (were all those extra jobs the same) that is only really 60 full time jobs.

    If someone doing 2 afternoons a week is no longer jobless then in some ways it's a bit of a wonder (and worry) that we haven't got zero unemployment

  • rate this

    Comment number 44.

    Stephanie, if being cheerful and optimistic about a tiny bit of good macroeconomic news was a sin you would be a paragon of virtue. Of course, there is still work to do to get the numbers down further, but..."buzz, buzz" that your phone?...Must be Iain Duncan Smith...Again!

  • rate this

    Comment number 43.

    Tend to be sceptical on government figures... Could the drop in unemployment figures be due in part to seasonal Christmas jobs?

  • rate this

    Comment number 42.

    "23.DavidinUSA 10 Minutes ago

    More likely bad govt, like the current US regime, is creating McJobs."

    Not so. States that have introduced anti-Union legislation have seen their average wages falling in comparison to other States precisely due to removal of the right to collective bargaining etc. Job creation has been no better either.

  • rate this

    Comment number 41.

    Yup the figures are very iffy ... It just means that the people claiming are down, not always in work. Thus, those placed on work experience, with private employment companies (the A4E fiasco), those on self-employed schemes, or just pushed of the Jobcentre books through sanctions, very common these days, are all not always counted in the official figures. So that may explain a few things ...

  • rate this

    Comment number 40.

    The ONS's own words, "the ONS does not have any estimates for job creation. The 82,000 does not show that 82,000 jobs have been created." The number of unemployed 16 to 24 year olds not in full-time education fell by 90,000! 82,000 accounted for! Also, a separate labour market survey by the ONS, which reports on monthly rather than quarterly movements in the jobs market, tells a different story!

  • rate this

    Comment number 39.

    The big question which the government conveniently avoids is how manym of these jobs are full time jobs that are paid at a rate that do not require topping up from the taxpayer? headline figures are meaningless and may I say deliberately missleading. The same as the drop in the figures for the unemployment figures, how many are no longer entitled to unemployment benefit, but are no longer counted?

  • rate this

    Comment number 38.

    You really need to take figures from 2008 up until now. I think you will then find out how bad pay packets really are and how much things have really gone up by. You only need to buy groceries, fuel and use utilities to see the real damage caused by politicians and bankers.

  • rate this

    Comment number 37.

    Tory spin says that unemployment is down, however most of the new "jobs" created aren't full time.

    Therefore underemployment is massively UP under this govt.

  • rate this

    Comment number 36.


    "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"

    Nuff said

  • rate this

    Comment number 35.

    3.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?"

    But all the lower wage earners are on tax credits, so it defeats the object.

  • rate this

    Comment number 34.

    Never mind badly-paid entry level jobs - I had a (sadly temporary) lecturer post that after I had paid transportation costs to get to work left me with under £100 a month more than I got on benefits... and I am a senior professional in my subject with both commercial & teaching experience! I'd still rather be working than on the dole, but when there are no jobs there is no shame not having one!

  • rate this

    Comment number 33.

    Having a sharp rise in employment combined with stagnant growth suggests something is amiss here. Likewise the claimant count remains consistent when employment falls. So does that imply the employed people weren't claiming benefits before they got their job? Perhaps this says something about the desire of those on benefits to get a job compared with those not on benefits?

  • rate this

    Comment number 32.

    A drop in unemployment by 82.000 in three months.

    Almost sounds to good to be true.

  • rate this

    Comment number 31.

    82,000 more employed, 3,000 less jobseekers.

    So where did the rest go?

    Same with the breakdown, 40,000 more in full time jobes, 4,000 less in part time.

    So where did the rest go?

    The empolyment statistics are so full of holes you could drive a busload of the unemployed through them!

  • rate this

    Comment number 30.

    How many new jobs are mandatory Workfare jobs where the government pay employers and the workers have to do it for nothing?

    How many people have been sanctioned out of the claimant count?

    Does the FTE of the private sector jobs compensate for the loss of public sector jobs or are we cutting 1 full time job with no benefit and replacing them with 3 part time jobs with benefits?


  • rate this

    Comment number 29.

    correct herr - if we get the public sector down to a manageable 5 million, we might have a chance, which means just 700,000 more to go

    its the only sector of industry where numbers required to do the work increases, the private sector processes mean less are needed and output actually increases!

  • rate this

    Comment number 28.

    Let's get this straight.

    Output is down and employment is up. This can only mean that more workers are producing less (productivity is falling).

    Is this really a wonderful thing?

    If the government is going to 'fiddle' the unemployment numbers they really ought to consider the implications! Lack of joined-up thinking yet again.

  • rate this

    Comment number 27.

    Be interesting to know how many jobs are subsidized by WTC etc. and these jobs should be counted as non jobs. This will give you a more accurate figure of the unemployed/underemployed.

    But yes it is better to share the work out, might bring about deflation.


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