STRONG private sector jobs growth means 500,000 more people are now employed than the government thought in March, meaning the benefits bill could be lower than feared, while public sector job losses have not had as severe a social impact as expected.
Employment rose to 29.6m in the three months to September, well above the Office for Budget Responsibility’s March forecast for 29.1m, while the unemployment rate has fallen to 7.8 per cent, not risen to 8.7 per cent as expected.
And the positive news is expected to continue – the OBR believes that, after a small rise, the unemployment rate will fall to 6.9 per cent by 2017, while employment will increase steadily to 29.7m in 2014, 29.9m in 2015 and 30.2m in 2016.
The private sector is generating jobs at twice the rate the state sector is shedding them, with market employment growing by 2.4m from 2011 to 2018, as state employment shrinks by 1.1m. ONS data put total general state employment at 5.65m at the start of 2011 – so headcount should fall to 4.55m in 2018.