Unemployment rises to 2.685m

Unemployment increased to 2.685m people, up 118,000, in the three months to November, according to the Office for National Statistics. However, despite the number of people in work increasing and a rise in part-time work, the number of employed people fell by 109,000. The Chartered Institute for Personnel and Development says the discrepancy is due to a rise in the number of self-employed people, up 101,000.

Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development, said: “The latest jobs data paint a mixed picture, with a smaller rise in unemployment than in the quarter to October, a slight increase in the number of people in work, little change in the number of people claiming Jobseeker’s Allowance (JSA) and a small but nonetheless welcome fall in long-term unemployment (down 10,000 to 857,000). But the picture overall remains one of increasing fragility and the jobs situation is set to get much worse in 2012.

“The small rise in employment masks another sharp fall in the number of employees. This is once again partially offset by a rise in self-employment, though this consists largely of part-time ‘odd jobbers’ and should be viewed as a sign of labour market weakness rather than strength. Moreover, employment overall increased only because there were more unpaid family workers and more people employed on government schemes. In total, full-time employment has fallen while part-time employment has increased.

“The encouraging figures on JSA claims and long-term unemployment are likely to reflect the initial impact of the government’s Work Programme. This appears to have boosted the number of people leaving welfare for work to take whatever job vacancies are on offer, despite a rise in redundancies which has contributed to an increase in the number of people making fresh claims for benefit.

“With total unemployment and youth unemployment still on the up, with growth in average earnings very subdued, and with a region like the North East now registering a 12% unemployment rate, it’s clear that the UK jobs market is in a very sorry state. It now looks likely that the level of unemployment at the end of 2011 will have reached 2.7 million, which was the CIPD’s forecast this time last year. There is nothing in these latest jobs figures that makes us feel any more optimistic about our forecast for this year, which points to 2.85 million (8.8%) by the end of 2012.”

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