THE LABOUR market continued to recover strongly in the three months to July, despite the double dip recession, the Office for National Statistics revealed yesterday.
Employment rose 236,000 in May to July, compared to the February to April period, putting the total at 29.56m, just 11,000 below its all-time peak in early 2008.
The unemployment picture also improved, edging down 7,000 during May to July on the labour force survey measure, and slipping 15,000 on the claimant count measure for August, also released yesterday.
Big increases in population, and 181,000 fewer economically inactive individuals aged 16-64 compared to the previous three months – the largest decrease since records began in 1977 – account for the fact unemployment is basically flat despite rapid job growth.
Of the close to a quarter of million gaining jobs, 102,000 were full-time employees, and 134,000 part-time.
Self-employment hit a new all-time high at 4.2m, with 52,000 extra people officially working for themselves.
The rise in jobs has not come from ministerial fiat. Excluding the reclassification of institutions providing further and higher education, the public sector shed 39,000 staff in the second quarter, while the private sector increased employment by 275,000. Although this data is one month in arrears compared to the rest of the data, it fits in well with the overall trend.
But some analysts said that the employment picture was too good to last in such a gloomy overall economic climate. “The economy would have to be growing in excess of trend rates to sustain these levels of job creation, so we must expect some payback in the form of falling employment levels in the months ahead,” said Andrew Goodwin at the Item Club.
Average weekly earnings were just 1.4 per cent up in the three months to July, compared to the year before, despite consumer prices going up 2.6 per cent, meaning workers took a real wage cut. The upshot of a real wage cut is that workers look more attractive to employers, potentially helping to explain the employment boost.
A wholly negative element in the data was the steady rise in long-term unemployment. Twenty-two thousand more people were jobless for more than 12 months in the three months ending with July, raising the total number to 904,000.