“The overall picture painted by these figures remains one in which the jobs market is stagnating. There was a seismic shift at the beginning of the recession in 2008-2009, when unfilled vacancies dropped to under half a million, while unemployment grew from 1.5 million to over 2.5 million. Since that point there has been little real change: both unemployment and vacancies – two sides of the same coin – have stuck more or less at the same level.
“While the overall labour market has been in the doldrums for nearly three years, the job prospects of specific groups have worsened. Most alarming is the impact on new entrants to the labour market, mainly young people. Their position continues to be dire as the latest figures confirm. There is also a further increase in the cohort of people unemployed for over a year, now larger than at any time in the last 16 years.
“Some recent policy developments are welcome, and the latest evidence shows that work experience programmes for young people have a small positive impact on job-finding chances, while the measures in the new Youth Contract are likely also to be useful.
“Ultimately, however, such measures for young people and others, while helpful, do not address the underlying problem: a lack of overall demand in the labour market. This reflects the macroeconomic situation, with GDP continuing to stagnate below its pre-recession level. Economic growth in the private sector has been too weak to generate enough new jobs to match the combination of a growing workforce, and people losing their jobs in the public sector as the austerity cuts bite. Achieving a substantial reduction in unemployment requires a serious growth strategy for the economy; by comparison, government schemes for the unemployed can have only a small impact.”
Further Analysis:
• The headline unemployment figure from the Labour Force Survey fell by 35,000 over the quarter to February taking the total to 2.65 million. The unemployment rate stands at 8.3 per cent.
• Within the overall total, youth unemployment also fell slightly by 9,000, but still stands at over 1 million, or 22.2 per cent of the economically active population aged 16-24.
• The monthly claimant count figure (the numbers claiming Jobseekers’ Allowance) rose slightly by 3,600 in March, taking the total to 1.61 million, close to its peak in the depths of the downturn in late 2009.
• The numbers in employment grew by 53,000 in the quarter to February.
• Job vacancies, however, remained unchanged at 464,000 in the three months to March.
• The overall level of redundancies increased slightly over the quarter to February (by 11,000).
