British and EU policy makers need to learn a lesson from positive United States jobs data as US unemployment drops below UK rate.
Dr John Philpott , Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD) comments as follows on official United States labour market statistics for January 2012 published earlier today by the Bureau of Labour Statistics:
“After a prolonged period of ‘jobless growth’ the US economy is now creating jobs at a far healthier pace. Significantly, the US unemployment rate (8.3%) has for the first time since the start of the financial crisis fallen below the UK rate (8.4%), and is now well below the average 10% plus rate in the euro area. Moreover, while US unemployment is on a clear downward path, joblessness is rising in both the UK and Europe with many forecasters expecting UK unemployment to rise close to 3 million (or 9%) by the end of 2012.
“Policy makers in both the UK and EU need to learn the lesson of what might be described as today’s ‘stimulus based jobs crossover’. The US jobs market is benefiting from a combination of both fiscal and monetary policy stimulus, in stark contrast to the crude austerity being imposed on the UK and euro economies. A dash to deficit reduction in the midst of mounting recessionary forces is the wrong medicine. For the UK this should mean temporary tax cuts to stimulate consumption and job creation plus directed expenditure on infrastructure projects to inject much needed demand into a stagnating economy.”
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