Part-timers push down jobless total
FALLS in the two key measures of unemployment provided a glimmer of hope that the labour market is starting to stabilise but economists warned of impending public sector job losses.
Figures from the Office for National Statistics published yesterday showed that the number of Britons claiming jobless benefits fell again in June by 20,800. The more comprehensive International Labour Organisation survey also showed unemployment falling by 34,000 in the three months to May, taking the jobless rate down to 7.8 per cent from 7.9 per cent.
“For the first time in many months we have the two key unemployment indicators telling us the same thing: that the labour market is improving. However, a note of caution is necessary – while the direction of the changes may now be in synch, the magnitudes are still very different, with the claimant count painting a far rosier picture,” said Hetal Mehta, senior economic advisor to the Ernst & Young ITEM Club.
Encouragingly, employment jumped by 160,000 in the three months to May, which was the largest rise since August 2006.
However, the rise in employment was driven by part-time and self-employed workers. Part-timers rose by 148,000 over the quarterly rise to 7.82m, the highest level since records began in 1992. The number of full-time employees is now 18.2m. The ONS said that a record 27 per cent of the total workforce was now in part-time employment, with the category accounting for the vast majority of the 160,000 rise in total employment – the biggest quarterly jump since August 2006.
Data out yesterday on pay growth also showed that the high unemployment has been putting renewed downward pressure on pay growth. After a tentative pick-up at the turn of the year, regular (excluding bonuses) average earnings growth fell to 1.4 per cent in May from 1.7 per cent, its slowest rate since last December. Private sector pay growth was just 0.6 per cent. Even taking bonuses into account, overall pay growth was just 1.3 per cent.