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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The surprising truth about ingrowing toenails (and other medical myths)

Medicine is littered with myths. For years we doled out antibiotics for minor infections, thinking we were speeding recovery.

From time to time, I remove patients’ ingrowing toenails. This is done to help – the condition can be intractably painful – but it would be barbaric were it not for anaesthesia. A toe or finger can be rendered completely numb by a ring block – local anaesthetic injected either side of the base of the digit, knocking out the nerves that supply sensation.

The local anaesthetic I use for most surgical procedures is ready-mixed with adrenalin, which constricts the arteries and thereby reduces bleeding in the surgical field, but ever since medical school I’ve had it drummed into me that using adrenalin is a complete no-no when it comes to ring blocks. The adrenalin cuts off the blood supply to the end of the digit (so the story goes), resulting in tissue death and gangrene.

So, before performing any ring block, my practice nurse and I go through an elaborate double-check procedure to ensure that the injection I’m about to use is “plain” local anaesthetic with no adrenalin. This same ritual is observed in hospitals and doctors’ surgeries around the world.

So, imagine my surprise to learn recently that this is a myth. The idea dates back at least a century, to when doctors frequently found digits turning gangrenous after ring blocks. The obvious conclusion – that artery-constricting adrenalin was responsible – dictates practice to this day. In recent years, however, the dogma has been questioned. The effect of adrenalin is partial and short-lived; could it really be causing such catastrophic outcomes?

Retrospective studies of digital gangrene after ring block identified that adrenalin was actually used in less than half of the cases. Rather, other factors, including the drastic measures employed to try to prevent infection in the pre-antibiotic era, seem likely to have been the culprits. Emboldened by these findings, surgeons in America undertook cautious trials to investigate using adrenalin in ring blocks. They found that it caused no tissue damage, and made surgery technically easier.

Those trials date back 15 years yet they’ve only just filtered through, which illustrates how long it takes for new thinking to become disseminated. So far, a few doctors, mainly those in the field of plastic surgery, have changed their practice, but most of us continue to eschew adrenalin.

Medicine is littered with such myths. For years we doled out antibiotics for minor infections, thinking we were speeding recovery. Until the mid-1970s, breast cancer was routinely treated with radical mastectomy, a disfiguring operation that removed huge quantities of tissue, in the belief that this produced the greatest chance of cure. These days, we know that conservative surgery is at least as effective, and causes far less psychological trauma. Seizures can happen in young children with feverish illnesses, so for decades we placed great emphasis on keeping the patient’s temperature down. We now know that controlling fever makes no difference: the fits are caused by other chemicals released during an infection.

Myths arise when something appears to make sense according to the best understanding we have at the time. In all cases, practice has run far ahead of objective, repeatable science. It is only years after a myth has taken hold that scientific evaluation shows us to have charged off down a blind alley.

Myths are powerful and hard to uproot, even once the science is established. I operated on a toenail just the other week and still baulked at using adrenalin – partly my own superstition, and partly to save my practice nurse from a heart attack. What would it have been like as a pioneering surgeon in the 1970s, treating breast cancer with a simple lumpectomy while most of your colleagues believed you were being reckless with your patients’ future health? Decades of dire warnings create a hefty weight to overturn.

Only once a good proportion of the medical herd has changed course do most of us feel confident to follow suit. 

This article first appeared in the 20 April 2017 issue of the New Statesman, May's gamble

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