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 126.

    The cause of the lower productivity will almost certainly be macroeconomic rather than cultural. If peoples' real wages fall too far, they are unable to spend their wages on a diverse enough range of goods and services - so the multiplier is actually smaller perhaps.

  • rate this

    Comment number 125.

    Low pay, short time, dead end McJobs.

    Well zipadeedodah.

  • Comment number 124.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 123.

    More talking down positive news.
    Getting a bit boring and predictable.
    I just wish the BBC were so critical and vocal about the last La La Labour incompetent government who have left us and our children's, children with a huge debt. Maybe then they would not have dug such a big hole with spin and lies.
    But I suppose that would upset their master.
    Impartial my arms......

  • rate this

    Comment number 122.

    I'm not anti-British at all, i am British, i'm simply stating facts. Poland is actually doing better than the UK, for the past 5 years they have been growing at 4-5% compared to around 0.5% that we have been averaging over the last few years and they never went into recession. In fact more British people are emigrating to Poland than ever before.

  • rate this

    Comment number 121.

    115, What would an economics student know about work? Another loan, overdraft, debt parasite on the real terms economy. Drop in a quote about Keynes or some junk like Flanders and Peston to sound smart, when in Beijing and Hong Kong the real thinking is manufacture and design, capital for industry. Your thinking is overdraft for Sainsbury.

  • Comment number 120.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 119.

    OECD...I can get more.

    Also i never disputed the fact "a polish bloke" turned up to work with a can. Secondly, it depends how you want to define good. Thirdly, you can never read too many books, i suggest you try it sometime.

  • Comment number 118.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 117.

    I'm sure it will get tougher to keep the unemployment numbers down, but lets just be happy that despite the public sector getting smaller and despite the number of new immigrants and despite the recession, the numbers are going down. I know it doesn't suit the story the BBC, Millibland and the rest of the Labour party want to tell us but there we are. I'm sure there will be some bad news soon.

  • rate this

    Comment number 116.

    #115 a polish bloke turned up at our place with a can of work thats a fact.....british workers are as good as any other workers your the 1 making sweeping read to many books..

  • rate this

    Comment number 115.

    I never said all British workers were unproductive nor that they weren't productive, i just said on average. That's not a generalisation at all, i'm an Economics student so i get a lot of my information the OECD, EU. You actually made a generalisation by stating "a polish bloke" turned up with a can, indirectly stating that they weren't productive. Nor did i say immigration was good/bad.

  • rate this

    Comment number 114.

    #110 thats a load of nonsense for a start...wheres your evidence...we had a polish bloke turn up in the morning with a can of beer in his hand.....the problem with you is you make stupid sweeping statements.

  • rate this

    Comment number 113.

    13 Minutes ago

    Stephanie Flanders kicks the economy again, what a miserable champagne socialist."

    So it was ok for George Osborne to pretend we were about to go bankrupt in the run up to the 2010 election (talking down economy) but it's not ok for SF to look beyond the headline to the detail behind it to see if the news is really the good news the Government claim it to be?

  • rate this

    Comment number 112.

    109. carbonbasebloke
    That's not very nice! have a good look where most of the immigrants are working!
    Try Agency's they hire mostly immigrants even though they claim they don't.

  • rate this

    Comment number 111.

    Where the US leads, for good or ill, the world usually follows.

    The UK is following the US down the road of declining wealth & the dissolving of social & community bonds, and the symptoms are a proliferation of McJobs; unsustainable debt; over-priced "dolls house" construction; violent streets; & uncontrolled immigration.

    Good news: the UK is not alone. Bad news: it's irreversible.

  • rate this

    Comment number 110.

    One of the problems with British workers on average is that they are less productive than many other European workers such as the Poles. Also increased competition of workers means that firms can fully exploit the labour market for the most productive and qualified for the job enabling them to grow. One of the problems is that Brits have been too used getting a job with little competition.

  • rate this

    Comment number 109.

    Stephanie Flanders kicks the economy again, what a miserable champagne socialist.

    If we weren't in the EU we could control our population, the EU immigrants are driving down wages.

    Next year prepare for swathes of unskilled Bulgarians and Romanians as legally they can all come here!

  • rate this

    Comment number 108.

    Part of lower productivity has nothing to do with workers, or even less efficient business practice - though some of it might be the latter. Remember productivity = output / hours of work. It is partly because the government's contribution to output has shrunk even as private output has risen.

  • rate this

    Comment number 107.

    Stephanie Flanders perpetuates the BBC tradition of seeing a negative in all positive news stories pertaining to the government. It's a travesty that so many BBC journalists have political viewpoints and are quite prepared to air them.


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