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.

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.

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.