More bad news in the latest numbers

Hours worked are down, the claimant count is up, fewer jobs are going and labour output is down.

By David Blanchflower Published 17 August 2011 15:13

Three more important data releases today put further nails in Osborne's economic coffin. The big news of the day was the ONS release of data on the labour market, which showed that all of the good news we had seen over earlier months this year has now gone into reverse.

First, the number of unemployed on the ILO count increased by 38,000 over the quarter to reach 2.49 million and the unemployment rate rose to 7.9 per cent.

Second, the claimant count in July 2011 was 1.56 million, up 37,100 on the previous month and up 98,600 on a year earlier.

Third, the unemployment rate for 16-to-24-year-olds was 20.2 per cent in the three months to June 2011, up 0.2 percentage points from the three months to March 2011.

There were 949,000 unemployed 16-to-24-year-olds in the three months to June 2011, up 15,000 from the three months to March 2011.

Fourth, though total employment is up on the year by 250,000, the total number of hours worked, which is a better measure of the labour input, was 910.6 million in the three months to June 2011, down 11.3 million from the three months to March 2011 and down by seven million from April-June 2010 when this government took office.

Fifth, in the three months to June 2011, 154,000 people had been made redundant, up 32,000 from the three months to March 2011 and up 4,000 from a year earlier.

Sixth, the number of job vacancies in the three months to July 2011 was down 22,000 on the three months to April 2011 and down 28,000 on a year earlier.

Seventh, regular pay growth remained benign at 2.2 per cent.

Chris Williamson, chief economist at Markit, commented:

Survey data indicates that unemployment is likely to continue to rise in coming months, as private-sector employers fail to make up for public-sector job cuts. The Markit/CIPS PMI survey showed companies reducing their headcounts in July due to concerns over the economic outlook and recruitment firms reported that the number of people they had placed in permanent jobs had risen at a rate only marginally higher than June's near two-year low. This tallies with official data showing that the number of job vacancies fell to the lowest in almost two years. Business confidence clearly needs to rise before employment growth will pick up again but, at the moment, the surveys suggest that companies remain worried about economic growth both at home and abroad and are generally erring towards cost-cutting rather than expansion.

None of this is good news.

Then there was the release of the Bank of England's agents' report on the economy, which suggested little evidence of growth in the economy. They reported evidence of weak growth in spending on consumer goods and services. The agents' score for growth in goods exports had fallen back somewhat from recent highs and a slowing in the pace of growth of manufacturing output, reflecting softening domestic demand.

Finally, the minutes of the August MPC meeting showed a vote of 9-0 for no change, which meant that the two inflation nutters Spencer Dale and Martin Weale had seen the error of their ways and reversed their wrongheaded votes for rate rises. Once again, my friend Adam Posen voted for more QE.

This paragraph is especially telling, suggesting the risks to the downside have increased:

The key risk to the downside remained that demand growth would not be sufficiently strong to absorb the pool of spare capacity in the economy, causing inflation to fall materially below target in the medium term. News over the month had generally reinforced the weak tone of indicators of global activity growth over the past few months, which had been particularly notable in data releases for the advanced economies. While some of the slowing would have reflected the impact of continuing disruption to global supply chains and the effects of the elevated price of oil, the committee judged it increasingly likely that the global slowdown would prove to be more prolonged than previously assumed.

Far from being vindicated, the data is giving Osborne and his failed economic strategy a deserved comeuppance. There has been zero positive news on the economic data front for some time now.

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Tags: jobs unemployment George Osborne

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41 comments

Wed, 2011-08-17 20:24 — rob andersen (not verified)

Blanchflower
you are a clown- u seek power at any cost, hiding behind you're 'credentials'. You're numbers are as usual either skewed, incorrect, misrepresented or misunderstood. You only write on Ball's instruction, your reward to be a post in govt you hope, therfore it is almost pointless to attack your argument because you are in effect a propaganda machine, and machines such as those don't care about right or wrong, just power- at any cost.
You have spent over 20 years calling for spend spend spend and borrow to do it. it is not enough that there is a global financial crisis (i'm not even sure you concede there is one because the cause of it is the school of economics that advocated spending regardless), and thus since there is this crisis we ALL have to act so carefully right now, which is the opposite of what you do when you post you're lies.
You don't understand business, economies or people and you're almost pleased to hear that the globe is in meltdown because you believe that people will blame Osborne. You casually dismiss the fact that more people are working than a year ago because you don't care about people, it's sick. tell that to the 250,000 more people who are working that it dosen;t matter because they're doing 10 mins less each day and if u ad that up... you are a clown indeed.
Folks, if we keep listening to this guy, he will bring on a currency crisis.Also, Investors will flee Uk, and yield curves (that's how much a mortgage costs to you and me) will rise again. This is blanchflowers 'endgame'- he seeks a dister, hoping to blame the tories and get in- he can't be so stipid to keep demnading more debt . In fact, his last piece regarding Lagarde (she's saying we can cut mid term and still increase growth) was so misrepresented that I can only think that it;s not out of stupidity he writes... it's just to get power, and some muppets will go along with it.
Remember, look back at his calls in the last 20 years- DON"T TAKE IT FROM ME!- Do you're own seraches- Krugman, Blanch, flower, balls, brown- it's all about stimulus, with these guys, it's all they have EVER called for. remeber, those 'academics' live VERY cosy lives, selling their books to the 'institutions' who then pass them onto their students- and guess who pays for it? you got it bud...

Wed, 2011-08-17 20:38 — Indu Pendent (not verified)

Under the last government, 1 million jobs were moved out of the private sector into the public sector. To pay for this the has been, and continues to be, massive borrowing running up the national debt.

A significant reasons that unemployment is rising is that the rate of recruitment of state sector jobs has been reduced. I dont see this as something to be ashamed of.

Saying that the economy was growing towards the end of the last government or shortly after is not true. The UK's productive economy has been on a long term decline since probably 2001 until recently - this is evident after deducting the massive borrowing from expenditure which has fueled the artificial unsustainable growth.

The increased unemployment now is substantially a legacy of simplistic fiscal expansion - it is two nails in its coffin (it has failed both in the UK and in the US).

Wed, 2011-08-17 20:53 — john henry (not verified)

@ Rob Anderson. You are clearly an economically illiterate imbecile. The writing is clearly on the wall for the economy. Face facts!
Get back to your cave. You are like a lot of the other neanderthalls that have ventured out recently to spout poisonous bile.

Wed, 2011-08-17 20:58 — Indu Pendent (not verified)

@Danny
"None of this is good news."

The last government have a lot to answer for and have undermined the back then kids and the kids now.

A silver lining is that unemployment keeps down interest rates, it should suppress imports and help the balance of payment and it keeps down wage costs which makes the UK more competitive.

Labour is to blame for the structural deficit (come on seriously, who else would you blame for that). The coalition are mending it for the kids of tomorrow but it will take a long time on account of the collossal mess they inheritied.

Mon, 2011-08-22 17:33 — Willp

Hours worked are down, the claimant count is up, fewer jobs are going and labour output is down.

These facts clearly annoy the Nobel laureates who grace these comments with their opinions.
Their ad hominem attacks only prove that they are unable to analyse the situation themselves. Their comfort zone is abuse.
If the coalition's aim is to regenerate the econmy, it is clearly failing. Perhaps its aim, however, is just to smash the working class through mass unemployment?
That's what Alan Budd, Thatcher's man in the Treasury, said was the aim - “unemployment was an extremely desirable way of reducing the strength of the working classes.”
So the vicious class hatred expressed by some makes sense - if they are members of the ruling class.
Of course, if they are not, then they are just shooting themselves in the foot - not very clever.

Wed, 2011-08-17 21:07 — Indu Pendent (not verified)

@john henry

Rob is right.

BTW The last government borrowed £350Bn before 2008 but what did our kids get for it? Now we have to pay it back.

Wed, 2011-08-17 21:23 — matthew fox (not verified)

The slowdown in UK Manufacturing is another nail in Gideon's coffin.

There is nothing simplistic in the private sector shedding jobs, Construction and the Financial Sector, seem to be in the vanguard at the moment.

Sometimes, it's not what you write, it is what you leave out. I notice he decides not to talk about Business and Consumer Confidence.

Consumer confidence has been in the toilet since the start of the year, and business confidence is starting to sink.

Facts do not lie, economic growth returned in the last quarter of 2009, and for the first nine months of 2010, it grew by 2.2%.

When Indu Pendent talks about massive government borrowings, I wonder which figure he is using? it may be the fictitious £100 Billion he quoted for year one of Osborne Borrowing, or the real figure of £150 Billion, with a projected figure of £150 Billion for year two.

Sat, 2011-09-17 08:26 — Benedict

You don't understand business, economies or people and you're almost pleased to hear that the globe is in meltdown because you believe that people will blame Osborne. You casually dismiss the fact that more people are working than a year ago because you don't care about people, it's sick. tell that to the 250,000 more people who are working that it dosen;t matter because they're doing 10 mins less each day and if u ad that up... you are a clown indeed.
http://www.diyhomerenovations.org

Sun, 2011-08-21 08:55 — Indu Pendent (not verified)

@matt

Yep - its a comedy, and we are the spectators watching a small greedy elite manipulating us for their own benefit with a disproportionate impact on the country. Our kids pay.

Thatcher broke the grip of the left and the xxx movement (a word NSM delete posts for) -- given that Labour is funded by them it represents a corrupt feedback loop. If the xxx had not gained such a strong foothold, Thatcher would never have got into power. So Thatcher was part of a bigger problem with the UK process.

Thatcher waisted the North Sea oil and corruptly concealed doing it. It resulted in the overvaluation of the currency which made imports cheap and choked off industrial exports. At the time is was argued that this put pressure on UK industry to grow more efficient but in reality it was a disasterous policy which caused the loss of swaives of industry.

However, we disagree on borrowing. In less than a decade before 2008, the last government doubled the national debt -- all the money the crown and country had ever borrowed in the 1,000 years before fighting all the wars and building society. The true figures are potentially (they never published the data) more than doublely worse as they exclude the off the balance sheet debt and the acruing contingent liability from the banks.

Something went wrong then with the political and economic processes before 2008.

Looking at Labour now, they are preparing to repeat the Blair years when they next get power. The deficit constrains what the Tory's can do so they are less likely to abuse power.

Wed, 2011-08-17 22:27 — Mike S (not verified)

Fair enough Clare - but I did say we need the data presented over time so we can see the trends. Are we progressing or regressing relative to others?

Thu, 2011-08-18 17:22 — matthew fox (not verified)

Indu Pendent, is that another no?

Don't you think our kids are puzzled where all that North Sea Oil revenue went circa 1979 to 1997?

They are probably puzzled about your ascertain that Osborne only borrowed £100 Billion in his first year, when the unpleasant truth is it was £150 Billion, with another £150 Billion on the horizon for this financial year.

Wed, 2011-08-17 22:54 — john henry (not verified)

@Indu Pendent. Get back to your cave you reactionary, rabid, right wing neanderthal. You too are one of the neanderthals who have ventured out recently from their DARK DARK DARK cave to stalk and stomp over the land and spew poisonous bile. HEEL! Get back to your dark HOLE!

Sun, 2011-08-21 11:22 — matthew fox (not verified)

Your nearly getting there Indu Pendent, your making very slow progress, and I know it is hurting you, but your having to admit that the Conservative movement is made up of complete frauds.

Thu, 2011-08-18 00:03 — Mr. Divine (not verified)

Clare has pointed out that you are acting like a used car salesman again. In the previous quarter unemployment fell. Does that mean that Osbourne's policies were working?

Please stop the propaganda. Tell us solutions. Look at the number of people who are pointing out your misrepresentations. And you have no comeback.

Thu, 2011-08-18 00:15 — Clare (not verified)

Mike given France has been downgraded I can tell you with absolute certainty that our unemployment figure will not grow as rapidly as theirs over the next 2 years. The capital outflow resulting from a downgrade and the resultant move in yield curves which raises mortgage rates for normal people like you and I makes this virtually inevitable. Danny will not tell you this because it does not fit his agenda of spend spend spend. Note also the countries with the AAA ratings Britain and Germany are the ones with the lowest unemployment levels this is not a coincidence, sound fiscal policy goes hand in hand with economic prosperity.

Thu, 2011-08-18 21:21 — Indu Pendent (not verified)

@matt

Its a disgrace that the North Sea oil revenue was waisted proping up the economy under the Tories.

The oil kept running under Labour and propped up the economy in excess of the massive £350Bn borrowed before 2008.

Adding the off the balance sheet liabilities, opportunity cost of oil, known debt and contingent liability accruing from the banking sector and it is likely that a collossal £1Tn fully accounted borrowing was run up before 2008 - enough to make the UK self sufficient with sustainable energy. Its hiddieous to think of what our kids have got instead - and all for the sake of keeping a few people in power.

Something worrying is that although the squandered money is openly known for the Tories, under Labour it is suppressed.

It is a disgrace that Osborne is borrowing £150Bn per year to support the structural deficit. Much tougher action is urgently needed to reduce the borrowing for the national and our kids interest even if it makes the world harder for us for while.

Labours deficit reduction plan is to borrow £250Bn more than the coalition.

Thu, 2011-08-18 03:18 — rob andersen (not verified)

Sanke oil salesman!! you're back! great responses by the way, and the killer punchline of your 'argument';
"the writing is clearly on the wall for the economy"... gold dust... thank you- you have no idea how much I GENUINELY appreciate comments like that... it's classic; "it's 'is fault cos he had a shop innit"
Genius.
@ matt- on leaving out consumer and business confidence. It's double whammy- confidence!! it's just so funny in the context- I can't stop smiling when i read u 2.. thankyou thank you thankyou... confidence.
Look Matt, u seem a bit more into the numbers- i'm not taking the mick. read a chapter in a stats book on stochastic processes or stochastic calculus, or it may come under random walk, dosen't matter if u don't get it all, but maybe try ask a matho mate , the concept is straightforward.. then we can talk friend.
Snakeman, I will never forget being called economically illiterate... smiles for years my man-

Fri, 2011-08-19 23:16 — rob andersen (not verified)

hey Indu and mr divine- i just found this somewhere else on the blog- thought i'd share it. So the context IS IDS debating wheter putting evryon in prison is a good idea. Someone then posts this;
"iain duncan smith may be slightly more moderate on some aspects of his response to the riots, but his views on reducing benefits for those not put in prison, is not more moderate. though the way things are going, there may not turn out to be anyone in that situation.

i have finally worked out where his idea falls apart, most. if someone goes to prison they get food and lodging, and therefore don't need benefits, whereas someone not imprisoned, must continue to meet their own living costs. to withdraw benefits would then create the bizarre situation where those who were not sent to prison were punished more than those who were.
the search for sanity in the tory mind is proving fruitless! they really are all bonkers!"
So the logic train here is that your benefit check is more important than your liberty... this is similar to matt and john henry logic, but this working thru I thought had to be shared. It explains the mad laws and rules we have come to have to live with- here is someone who is happier forsaking their freedom for the sake of a benefit cheque, and it;s all thought thru in their head. How did we get so low as a species?
Matt- guess u didn't read up on the standard deviation then lol.
Snakeman, genius. let me know when u've understood the analogy of the cave- truly, u will understand why everytime u bring it up it's such value- i can rely on your lazyness to educate yourself and thus he joke on you grows stronger and stronger each time- genius, and thank you again.

Thu, 2011-08-18 08:10 — john henry (not verified)

@Rob Andersen.

Heel! Get back to your cave!

Sun, 2011-08-21 23:22 — Indu Pendent (not verified)

@matt

???
Why do you keep calling Indu a Tory?

I know quite a few of the tory and labour elite. Some of each side are crooks (just look at the police convict records). There are a lot more posh school professional politicians on the Labour side - the Tories have it when it comes to following their values and beliefs even if you do not share them. Labour has no anchor, it exists to win power for a self serving elite so on that basis it is by far the most corrupt party process. Even you see that when you are not blindly following others.

Thu, 2011-08-18 10:07 — Vic Singh

None of the right wing trolls here have an answer to why unemployment is at it's highest for 23 years?

Where are the Private Sector jobs Mr Cameron said would take up the slack?

By cutting to fast Cameron, Osborne and Co. have killed the economy dead.

There is only one explanation for cutting to fast and that is purely political, nothing else.

Tories are incompetant buffoons and their trolling foaming rabid lapdogs that come here are fools!

Thu, 2011-08-18 10:22 — Indu Pendent (not verified)

@john henry
Its not big and its not clever.

Fri, 2011-08-19 08:01 — Luddite (not verified)

'Hours worked are down, the claimant count is up, fewer jobs are going and labour output is down' 1OO.OOO new arrival into an already depressed Labour market last year alone. It's not surprising. Hours worked are down, the claimant count is up hours worked are down.

Thu, 2011-08-18 10:47 — Indu Pendent (not verified)

@matthew fox
Financial services was Labour's golden goose which turned out to be a sick lame duck. Vast amounts of the nation's wealth have been destroyed by failure to regulate it properly - even Labour accept this.

I'm not sure you fully understand Keynes. Construction is a cyclical business. Its normal that after a prolonged period of borrowing fueled simplistic fiscal expansion that Construction needs time to recover.

"Facts do not lie, economic growth returned in the last quarter of 2009, and for the first nine months of 2010, it grew by 2.2%"

Again, sadly Foxy, you need to stop hiding away and start making up your own mind up rather than following your friends. From you growth figures you need to subtract the impact of the government borrowing which caused the growth.

Thu, 2011-08-18 10:51 — matthew fox (not verified)

Why would I want to be your friend Rob Anderson?

Should I ask John Henry for directions, I am unfamiliar were your cave is situation.

Thu, 2011-08-18 10:58 — Mr. Divine (not verified)

@Vic Singh: According to the national stats there has been an increase in employment of over 250,000 more people in the last year in the UK. Many of these jobs have been taken by immigrants from Eastern Europe.

Most native born people realise that they are better off on unemployment benefit with the odd cash 'thingy' than doing these jobs as they are low paid.

Next, although I don't have figures for this I suspect that many people have been 'forced off' the disability allowance onto the unemployment by the stricter guidelines for claiming disability. So in effect you've got people who were unemployed before (on disability) coming into the official unemployment stats.

This explains why employment rose by 250,000 and unemployment marginally increased as a percentage.

By the way Vic Singh, only little boys call people names like 'troll'. And little boys don't know the difference between 'to' and 'too'.

Thu, 2011-08-18 11:02 — Indu Pendent (not verified)

Actually, I would like to correct a previous post.

There are 3 not 2 nails in the coffin of simplistic fiscal expansion (government borrowing to inflate the economy for the synical manipulation of voter preferences):

- its been a disaster for the UK
- its been a disaster for the US
- its been a disaster for the World as it fueled the Nazi's - they had to go to war else their economy would have collapsed through bankruptcy due to the massive debts they ran up.

We are watching the Kondratiev cycle unfold. The way to break the cycle it is to keep it simple, honest, transparent, competitive and focussed at all times on our children. Not everyone agrees with me, not least Danny.

Mon, 2011-08-22 10:00 — Mr. Divine (not verified)

Matt: there are nearly all public school boys, labour and Tory ... they are bullshitters. haven't you realised that?

Thu, 2011-08-18 11:07 — matthew fox (not verified)

Indu Pendent is a disaster, the " Act of God " variety.

Mon, 2011-08-22 11:54 — rob andersen (not verified)

matt
do u even know why you're politically active?

Thu, 2011-08-18 11:48 — Indu Pendent (not verified)

@matt

???
This is an economics blog.

Relevant to your question - we can choose whether to live only for the here and now (borrow, spend, enjoy), or whether to leave it in a better state than we found it for our kids.

Wed, 2011-08-17 15:46 — Suzanne (not verified)

His performance on the television was irritating in the extreme. The message being it was inevitable given the global context.
His strategy seems to be never accept responsibility for anything and if he can't put the blame on Labour, weather, external forces or one off events then get ginger Danny out to face the flak. It's quite an achievement that he isn't much more of hate figure given his incompetence and sneering disposition.

Sat, 2011-08-20 13:00 — Indu Pendent (not verified)

I'd be up for offering low level convicted criminals the opportunity to trade their conviction and prison for a tough option of a term of graft - like enhanced national service, in the community or as labor for business (we could protect industries that going to China where people dont live as well as our criminals). They could earn self esteeme, discipline, a bit of money, pay their way, have a clean CV (the conviction could be wiped), gain skils, be integrated with people outside of their normal circles, have the ferile ironed out, gain aspirations and at least see the difference between the life they follow and what they could be an alternative.

Left wing greedy egotistical self focussed phoney human rights power seekers prevent it - corruption is corruption is corruption what ever name you give it.

Wed, 2011-08-17 17:04 — Harry (not verified)

No doubt this is more proof of how Britain is a safe haven in the storm and that the slash & burn policy of this government was right all along.

Wed, 2011-08-17 17:18 — Clare (not verified)

Danny please do the same interntional comparison on unemployment rates that you did yesterday on GDP. Oh no you won't do that because it would show our unemployment rates are very low on an international basis. Of course no one is happy about this rise but oddly I seem to recall you didn't demonstarte this level of Schadenfreude when unemployment was higher under the last Labour administration. Nor do you critique the failure of the US stimulus package which you lauded which absolutely failed to have any significant impact on jobs. You can't simply be a nay sayer you need to bring some empirical evidence to show your policies would change the situation in some way.

The reason people show your column such vitriol is because it's so obvious that your analysis is predicated upon which party is in power. Had these number come out under a Labour government doubtless you'd try to spin them in a positive light. That may work when your playing to your fans but it isn't going to win you a wider audience and your credibility is only going to suffer in the long run.

Wed, 2011-08-17 17:35 — Boomandbuster (not verified)

Danny is right again the answer is to simply borrow more money from our unborn children, it's a fact it has worked so well in Greece, Portugal, Italy and the US. Everything is rosy in these places I can't see a problem with his stratgey.

UK budget deficit is 10.4% (the structural deficit is huge also and is nothing to do with banks) of GDP against this background it's remarkable the UK is still AAA rated. You could call Gideaon a miralce worker or really the markets are pretty half baked. Danny wants more borrowing, Danny wants us to be Greece.

Wed, 2011-08-17 17:46 — Mike S (not verified)

Why don't you post the international figures Clare over a suitable timeframe so we can all see the trends and acknowledge the point you are making?

Well done David - you're clearly rattling some cages!!

Thu, 2011-08-18 14:05 — Mr. Divine (not verified)

Indu: he's not up to it.. I bet he hasn't even got an economics A level.

Wed, 2011-08-17 17:58 — Clare (not verified)

OK Mike unemployment rates are:

EU wide 9.3%
Italy 8.1%
Germany 6.0%
France 9.5%
Greece 15.0%
Spain 20.9%
US 9.1%
UK 7.9%

Hardly say anyone I'm rattled UK unemployment is not high by international measures. Mike please note the ones with the debt/rating problems are the ones with the highest unemployment.

Wed, 2011-08-17 18:10 — matthew fox (not verified)

The unemployment figures are bad, because Osborne was bragging that jobs are being created.

One reason the jobs are bad, is because of women having to give up their jobs, due to increased childcare costs.

Having 38,000 new claimants for Jobseekers allowance, will not help bring down deficits.

Sat, 2011-08-20 20:36 — matthew fox (not verified)

I prefer the phrase " Bankrolled " not propping up, Indu Pendent.

Between 1980 and 1985, North Sea Oil revenues account for 15% of total government revenues.

You also forget, at the same time, the government of the day, managed to rack up debts as well. By 1997, the National Debt stood at £400 Billion.

I do love the comedy value of these numbers.