Unemployment falls, but at a slower rate

Posted on June 05, 2014 by Rory O'Farrell

Rory O'Farrell

The latest CSO data shows a stabilisation in unemployment rates when compared to the previous month. The standard unemployment rate is currently at 11.8% for May, identical to the rate in April, and 12.0% for the period January to March. This is equivalent to roughly 4,300 less people unemployed.

Though the rate has continued to decline, it is declining at a slower pace than previously. A decline of 0.2% per quarter means it will take 8 and a half years (or autumn 2022) before unemployment reaches 5%.

Compared to May 2013, the number on the Live Register fell by 32,973 while the number of casual and part-time claimants fell by 11,181. Therefore “full-time” claimants are down by 21,792. In line with other CSO data, workers seem to be shifting from part-time and casual employment to full-time employment.

The Live Register is not a measure of unemployment. However it is interesting to compare Quarterly National Household Survey (QNHS) annual trends with those of the Live Register. According to the QNHS the numbers unemployment fell by 33,900 in the first quarter of 2014 compared to 2013, while the numbers on the Live Register fell by roughly 31,500 in the same period but with roughly 8,500 few people signing on as part-time/casual. This suggests about 23,000 less ‘full-time’ unemployed on the Live Register. This requires large numbers of people moving from outside the labour force such as ‘Home duties’ into employment and this is consistent with QHNS data. However it is unclear why this is the case. In most EU countries how people transition into employment is reported and the CSO plan to do this in the future. Some of these patterns may be due to the CSO altering their sample for the QNHS in light of the 2011 Census. However the mismatch is less than in the previous quarter. These patterns are very unusual, though not unprecedented.

In May 2014 the number on Jobseekers Allowance is almost identical to in May 2013 (300,266 compared to 299,633) by with a large fall for those on Jobseekers Benefit (52,785 compared to 112,107). This suggests there are some people with broken spells of employment/unemployment. Live Register figures have fallen most for those signing on for less than one year, and for under-25s (which can be due to changes in eligibility rather than changes in the labour market). The number of those who were last employed as craft workers (which includes construction workers and agricultural workers) on the Live Register has fallen by almost 14,000.

Posted in: JobsMacroeconomics

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