The jobs figures: even if it’s a blip, it’s a worrying one
In the corridors of Westminster, you may hear a faint cackle, halfway between a laugh and a groan. Trace where it comes from and you’ll reach the door marked “Opposition Economics Team”.
Members of Labour’s front bench must be rueful when they look at today’s employment figures. They cover March to May, the quarter when the election took place and show that, as the prime minister boasted to voters about the strongest job creation record in the western world, so the reality was suddenly heading in the opposite direction.
Compared with the previous quarter, employment is down 67,000, the first fall for more than two years. The number unemployed has risen 15,000 (14,000 of that is an increase in the number of unemployed women) and the ‘adjusted’ Claimant Count – which takes account of the introduction of Universal Credit – for June is up 7,000 on the May figure.
If we look at different types of employment, compared with last month, the number of employees working full-time fell (7,000), the number of employees working part-time fell (21,000), the number of self-employed people working full-time fell (47,000) and even the number of temporary employees fell (by 9,000). Only the number of part-time self-employed people grew (17,000), which is hardly reassuring.
For the first time in over a year, the total number of hours worked in the economy has fallen for two months running:
Total hours worked
And the ratio of the number of job vacancies to the number of unemployed people has risen for two months running, for the first time in over two years:
Vacancies and unemployment
It’s important not to get carried away about these changes, which are quite small. The ONS release includes a note warning that “in general, changes in the numbers (and especially the rates) reported in this statistical bulletin, between 3 month periods are small, and are not usually greater than the level that is explainable by sampling variability”.
For instance, employment fell 67,000 over the quarter, but sampling variability for quarterly changes in this measure is plus or minus 142,000. The employment rate went up 0.1 points, but the sampling variability for changes in this measure is plus or minus 0.2 points.
The combination of all these changes does suggest that something real is happening. But even if the figures are right it could be a real blip. Labour market statistics can be volatile these days:
Quarterly changes in employment levels
Employment growth was briefly negative at the start of 2013, for instance, but it started to grow again a few months later.
There’s a certain symmetry to the employment and pay figures. For a couple of years we’ve been worried that the jobs recovery has happened at the same time as earnings have fallen in real terms. Today’s figures showed average weekly earnings being 3.2 per cent up on a year previously; in May, the Consumer Price Index stood at 0.1 per cent and the Retail Price Index at 1.0 per cent.
If we had a strong recovery we should expect to see employment and pay both improving. It seems we are stuck in a rut where the best we can manage is one or the other. The risk now is that renewed austerity may return us to the experience of 2010-12, when the UK nearly entered a double-dip recession, in which case it’s the positives in today’s figures that will seem like a blip.
This blog originally appeared on Left Foot Forward and is cross-posted here with permission.