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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Michael Gove definitely didn't betray anyone, says Michael Gove

What's a disagreement among friends?

Michael Gove is certainly not a traitor and he thinks Theresa May is absolutely the best leader of the Conservative party.

That's according to the cast out Brexiteer, who told the BBC's World At One life on the back benches has given him the opportunity to reflect on his mistakes. 

He described Boris Johnson, his one-time Leave ally before he decided to run against him for leader, as "phenomenally talented". 

Asked whether he had betrayed Johnson with his surprise leadership bid, Gove protested: "I wouldn't say I stabbed him in the back."

Instead, "while I intially thought Boris was the right person to be Prime Minister", he later came to the conclusion "he wasn't the right person to be Prime Minister at that point".

As for campaigning against the then-PM David Cameron, he declared: "I absolutely reject the idea of betrayal." Instead, it was a "disagreement" among friends: "Disagreement among friends is always painful."

Gove, who up to July had been a government minister since 2010, also found time to praise the person in charge of hiring government ministers, Theresa May. 

He said: "With the benefit of hindsight and the opportunity to spend some time on the backbenches reflecting on some of the mistakes I've made and some of the judgements I've made, I actually think that Theresa is the right leader at the right time. 

"I think that someone who took the position she did during the referendum is very well placed both to unite the party and lead these negotiations effectively."

Gove, who told The Times he was shocked when Cameron resigned after the Brexit vote, had backed Johnson for leader.

However, at the last minute he announced his candidacy, and caused an infuriated Johnson to pull his own campaign. Gove received just 14 per cent of the vote in the final contest, compared to 60.5 per cent for May. 


Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.