What do the unemployment figures actually show?

There was no good news in today's figures -- and this is just the beginning.

By David Blanchflower Published 14 September 2011 17:18

The awful unemployment numbers today came as no surprise to those of us who have been arguing these many months that George Osborne's economic strategy is disastrous for the British economy. There was never the slightest prospect of a expansionary fiscal contraction in the depths of a once-in-a-century financial crisis.

This is all likely to get a lot worse over the next few months. Unemployment rising, the number of jobs and total hours falling and rising unemployment durations. There was no good news.

David Cameron, master of understatement, admitted at PMQs today, at which he took a batterring over the economy, that the numbers were "disappointing". Indeed, Labour today accused Cameron of "bluster, evasion and untruths" in his attempt to defend what they called his "failing economic record". Liam Byrne, Labour's shadow work and pensions secretary, said:

David Cameron's complacency today was simply breathtaking. And, under pressure to explain why unemployment is rising and the economy flatlining, he once again resorted to bluster and evasion and got his figures badly wrong.

So what did the ONS data release actually show, rather than what the Prime Minister wished they showed?

1. An increase in ILO unemployment of 80,000 on the rolling May-July quarter, going over the 2.5 million mark. The unemployment rate remains at 7.9 per cent.

2. The more timely claimant count for August increased by 20,000.

3. There was a growth of 29,000 of discouraged workers, who were out of the labour force but reported that they wanted a job

4. Employment fell by 69,000 on the quarter but was up 24,000 on the year. Workforce jobs were down 100,000 on the quarter and down 41,000 on the year.

5. Public-sector jobs fell 111,000 on the quarter and 240,000 on the year, contrary to what Cameron falsely claimed at PMQs today. Private-sector jobs were up 41,000 on the quarter and 264, 000 on the year. This is approximately half the 500,000 jobs that Osborne recently claimed had been created under his watch. It is becoming clear, as we get more data, that most of the jobs created were under Darling's watch.

These numbers are set to worsen further and as each month goes by, it will become increasingly obvious that private-sector job creation is slowing fast. Time to own these numbers, George. Your policy is failing fast.

6. Hours picked up a little, but as I suggested in an earlier blog, the decline observed over the past couple of months was not just because of bank holidays, as David Smith recently claimed on his blog. Total hours were 914.3 million on the quarter, down from 921.3 million in May-July 2010 when the coalition took office.

7. Youth unemployment rose by 78,000 on the quarter to 973,000. Especially worrying was the rise of 35,000 of 18-to-24-year-olds on the quarter who had been unemployed for 12 months or more. The number of 18-to-24-year-olds on the claimant count for at least 12 months was also up on the month. Long duration unemployment is especially bad and shamefully, the government seems to have no policy to deal with this growing problem.

8. Wage pressure remains benign. Regular pay rose by 1.7 per cent on the month so, with inflation at 4.5 per cent, driven primarily by Osborne's VAT increase, most workers are having real pay cuts.

9. Scotland was the only region that saw falling unemployment on the quarter.

This is just the start of a flood of dreadful economic news that is expected to hit us over the next couple of months. The coalition government's economic strategy is in tatters.

Ed Balls and Ed Milband are going to have a field day with Natalie Rowe's -- aka Mistress Pain -- claims of Osborne's cocaine use and his interest in her work as a dominatrix. Talk of paddles, whips, chains and handcuffs are certainly not going to do much for his credibility, which is already in tatters as the economy tanks. Osborne's sneering is going to come back to haunt him. The Labour leader today suggested at PMQs that the Chancellor had "lashed himself to the mast. Not for the first time perhaps!"

Sadly, the coalition appears to believe that unemployment is a price worth paying. I suspect that the British people will have something to say about that.

Tags: unemployment

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39 comments

Wed, 2011-09-14 22:59 — mike555

Matt, you're talking of falls on top of years of booming prices under the previous government.

Prices are still very high, even after the falls you mention, we need many more months of 1%+ falls before we get back to sensible levels.

Thu, 2011-09-15 20:29 — Indu Pendent (not verified)

@colin (ISTJ)

May be see this
http://en.wikipedia.org/wiki/Phillips_curve

The 'sticky prices' issue at the moment is about tackling public sector unions. The goverment should get on quickly with dealing with the pension issue but also bundle in other stuff like a few redundancy programs and tighting state wage price policy. Once the unions are sorted out, the Philips curve take a stronger grip and start mending the whole economy.

We have never been in an economy with prolonged deflationary wages where the fiscal levers have been exhausted. I predict we will see cultural norms develop where people accept erosion of pay - it should feedback even more into Philips. That why I think 3% per year is low.

Its the solution to the UK's problems - Osborne knows all about it which is why the Tory elite dont mind unemployment.

Thu, 2011-09-15 00:09 — Mr. Divine (not verified)

What everyone is forgetting is that government policy is pushing people off disability benefit onto unemployment benefit. When people are on disability benefit they are in fact unemployed but not on the official unemployment figures.

Employment is actually increasing.

Sat, 2011-09-17 09:47 — mike555

@Matt

No answers again I see.

"The odd thing is Bozo555 whines about insults but tolerates bad and abusive language. "

What on earth are you talking about?

"I live for the day Bozo555 practices what he preaches."

Again, what on earth are you talking about?

"House prices fell by 16.2% in 2008 "

Then what happened in 2009? And what happened from 1997 - 2007? You need to put these falls in context. Prices are still high.

Thu, 2011-09-15 21:54 — matthew fox (not verified)

Why does Bozo555 keep running away from his own words.

According to this genius, low interests are " Propping Up " house prices.

How can house prices decline by 2.6% in a year, if that is the case?

Thu, 2011-09-15 22:03 — Awake!

foxy
u can still prop something up and it sinks- it's just that it sinks at a lesser rate. Do you ever think before u write anything?

Thu, 2011-09-15 07:14 — Colin Sloss (not verified)

Indu and Mr Devine make me laugh. According to Indu high unemployment cuts the cost of wages, soon to be very low! Mr Devine tells us cutting those sroungers on disability is not real unemployment. Ok so you haven't got hands, what do you think teeth are for?

Thu, 2011-09-15 08:08 — Boomandbuster (not verified)

@ swatantra nandanwar

very silly comment about what labour inherited in 97. unemployment had been falling for 4 years thanks to us departing from the ERM and the structural reforms of the 80's. if you don't believe me go and look at the uneployment data. as for just creating jobs it may be a nice short term win but as we've seen in greece paying ppl to do nothing doesn't end well.

@matt

you have your head in the sand young man. unemployment in this country is not high by international standards (go look at the data vs US, france and italy) and the biggest driver on our economy will be what happens to the eurozone and what the US does with its fiscal policy. as for your theory on confidence this was extermely low when the coalition came in any way, so no this did this did not all start with the austerity budget. open your eyes the world is teetering on the brink due to sovereign debt levels and you think we can insulate ourselves by just borrowing a bit more, that is pure delusion.

Thu, 2011-09-15 08:20 — Mr. Divine (not verified)

Colin: Are you saying that the government isn't trying to force people off disability benefits? if people are taken off disability invariably they will go onto unemployment benefit ... thus adding to the official unemployment figures. What bit don't you get?

I'm not making any value judgements .. I am simply stating what is happening and why unemployment figures are rising when employment is also rising.

Thu, 2011-09-15 09:52 — swatantra

Was it really 4 m unemployed and a great number on incapacity benefit so that Major could massage the figures? Was that what Labour inherited in '97.
Talk of Greece and the UK in the same breath is aways a mistake. The Greeks especially the public sector have a culture of filling their pockets with eurodrachmas and not doing very much for it. Its quite a different kettle of fish here.
However we in Britain must avoid falling into that trap and rediscover that work ethic.

Sat, 2011-09-17 17:49 — matthew fox (not verified)

Poor Bozo555, no backbone, given up the ghost, can't defend his theory that low interest rates are " Propping up " house prices.

Yes, lets talk about context bozo555, lets talk about " Propping Up " as a phrase.

House prices in 2009, rose by an huge 1.1% Bozo555, that's correct old man, house prices roared ahead by over a whole one percent point, nearly reversing the 16.2% decline in the previous year.

Let's talk about the phrase " Housing Boom 1997 - 2010 " I love revisiting that old chestnut.

I have identified, House prices declined by 16.2% in 2008, rose massive 1.1% in 2009 and declined by 3.4% in 2010 ( not so slightly then old chap ) and don't forget Aug 2011 house prices are 2.6% lower, when compared to Aug 10.

Don't forget, you keep whining about low interests, yet magically, we have seen at least a 20% decline in house prices, since the introduction of 0.5% interests.

Just remind me how you have managed to circle that square again Bozo555?

Thu, 2011-09-15 11:11 — Awake!

So the positive numbers on jobs were created by Darling but the economy going down hill is Osborne's fault.
And nothing on the switch from disability to unemployment benefit.
The private sector is taking all of this pain already and what is REALLY telling is the way Milliband distanced himself from the Unions and strike action. This says it all. Say what you like,but his actions speak louder than words.

Mon, 2011-09-19 13:04 — Awake!

foxy
so ure denying there was a housing boom under labour? u actaually think that... its what i mean by u are demontrably a fool.
Also, i have explained before to u foxy. So again for your busy brain;
'u can still prop something up and it sinks- it's just that it sinks at a lesser rate. Do you ever think before u write anything?'
i wrote this before, yet u asked the question again- are u a completely moronic? do u get that your cretinous comments, wilfully stupid inability to even try makies yourself look either completely challenged in the brain dept or like some rabid lefty- I've told u this before, u do the left no favours, u remind people of Balls and the old style- so, if u wanna help, read the answers to your dumbarse questions in the first place. And if u don't understand that the rate of decrease is lessend by keeping rates low that's fine, but have the balls to say u din't know it- no man will refuse u that explanation (no real person anyway), but have the courtasey of understanding the explanation (it's not a value judgement, it just basic algebra)
So mike555 has asked u a question, and others- why not answer them?

Fri, 2011-09-16 10:27 — mike555

@Matt

"Why does Bozo555 keep running away from his own words."

You are funny Matt, I've answered all your questions, there's a long list of mine you haven't answered. So who's running?

"How can house prices decline by 2.6% in a year, if that is the case?"

As I've explained before house prices are still high, these are small falls on top of years of booming prices under New Labour.

What do you think will happen to house prices if rates go up to just a neutral rate of say 5%?

I've asked you before and you haven't answered, I think the reason is because the answer will back up everything I've said.

Sat, 2011-09-17 19:32 — mike555

@Matt

Truly dismal as usual. I've explained myself more than enough, everyone can see it.

I notice you haven't answered my questions as usual.

Sat, 2011-09-17 19:38 — mike555

@Matt

Which figures are you going off now for 2009? Last time you used Nationwide. House prices are still high whichever way you look at it.

Nothing changes the fact that there was a disastrous house price boom under New Labour which priced many low and medium paid out of the market. Funny you don't seem to be able to comment on that one.

Fri, 2011-09-16 11:53 — Robert Taggart

What the figures show - the futility of this (and the last) governments obsession to move claimants on health related benefits to work related.
What work ? Half a million vacancies for two and a half million claimants - Quart, pint, pot, come to mind !
Some of us scroungers are happy as we are - does that not count for anything ? !

Fri, 2011-09-16 11:59 — Mr. Divine (not verified)

Fuck off Foxy .. you never answer the questions that we pose to you. is it because you're thick?

Sat, 2011-09-17 20:36 — Awake!

Fox
As usual you demonstrably make a fool of yourself. Ure arguing there wasn't a housing boom under labour?? 1% here or there whatever, stock is INSANE levels you twat. U will even argue against the bleeding obvious to make some crummy point. You are a type that will say or do anything to back a political goal no matter the cost. The difference between your class and Osborne is that he takes a path that loses him votes, but thinks longterm. I learn quick, and see what you are... Your the dust, the part no one has to worry about because in evolutionary terms you do not form part of society, yet you probably count yourself as some form of socialist. And that's what I realised this week, hardcore socialists are the opposite of what they preach. It's why the right can forget about u, not worry in the slightest because you are not even connected to the society you espouse. Your worse than criminals because generally your bright, but u wilfully employ your intellect to gain power. I'm working on why, I think jealousy involved but not sure what ure jealous of

Sat, 2011-09-17 20:37 — matthew fox (not verified)

Which ever way you look at it Bozo555, your super wrong, not just wrong, just all in wrong.

As a matter of fact, I am using the Halifax house price index, is that okay with you, my simple minded friend?

Somehow I don't think you will be asking me about house prices in 2009 again, I mean 1.1%, do you really think that reverses a whopping 16% decline.

But you keep forgetting Bozo555, it was you who stated low interest rates where propping up house prices, not me, and if that is the case, why did house prices decline in 2008, 2010 and into 2011, if interest rates are so low.

You keep forgetting Mrs T and John Major tripled the number of low income household, Gordon Brown actually cuts the number of low income household, funny how that gem keeps escaping your memory.

By the way, you need to be keep explain, otherwise, your own words will keep coming back to haunt you.

Mon, 2011-09-19 13:43 — Vic Singh

what you have said has been confirmed by the IMF today David.

http://www.leftfootforward.org/2011/09/imf-results-deficit-reduction-in-...

Fri, 2011-09-16 15:34 — Indu Pendent (not verified)

@matt

Foxy, if you've a light in the fox hole may be read the Dale Carnegie (about making friends rather than being led by them).

You never did answer whether UK government borrowing should be increased or decreased. Is it because the 2 Eds have differnt views and you are confused about which one is the leader?

Thu, 2011-09-15 15:15 — E Hart (not verified)

Well said DB. This is the most inane folly of a policy. I am waiting for the "Ceaucescu moment" when they realise that their own idiotic petard is chasing them down.

They've nothing left but platitudes and empty rhetoric. What's really extraordinary is that people like this should ever have found themselves in charge of an economy: a prime minister who is a marketing bore with an unerring eye for the trite and man as chancellor who isn't fit to run whelk stall.

Sun, 2011-09-18 13:21 — matthew fox (not verified)

I could never be jealous of you awake, more glad i could never sink to your level.

Thu, 2011-09-15 15:25 — Jympton

"Sadly, the coalition appears to believe that unemployment is a price worth paying. I suspect that the British people will have something to say about that"
Sadly, I don't think they WILL have anything to say. Thatcher knew that there were enough greedy, selfish people around to vote her in again and again, just as long as THEY were looked after. 'The Great British Public'?? Yeah, right...

Thu, 2011-09-15 15:31 — Boomandbuster (not verified)

@swatantra nandanwar

"Was it really 4 m unemployed and a great number on incapacity benefit so that Major could massage the figures? Was that what Labour inherited in '97."

not sure what you are trying to say? new labour certainly did nothing to reverse the incapacity benefit culture left over from the 80's, unemployment had been falling for 4 years when labour came into office and this rtrend continued for a couple of years after they took office. governments can have little or no impact on private sector employment in any case, though as you point out they can if they choose thorw money down the drain by employing people unproductively in the public sector this certainly happened under labour.
the productivity of the public sector fell 15% between 97- and 2007 see the IFS report on it here. www.ifs.org.uk/bns/bn92.pdf. this line is particularly relevant..........

"If the Government had managed to maintain the “bang for each buck” at the level it inherited
in 1997, it would have been able to deliver the quantity and quality of public services it
delivered in 2007 for £42.5 billion less. Alternatively, it could have improved the quality and
quantity of public services by a further 16% for the same cost."

Wed, 2011-09-14 17:31 — swatantra

We know for a fact that unemployment is tool in the Tory toolkit to get the economy back into balance.
Whereas Labour believes thatgeting mor people into work means that they are contributing to the economy through paying tax.
The previous Major Govt left Labour with a huge unemployment queue o clear up, and I have a feeling that te same will happen this time round.

Thu, 2011-09-15 16:48 — RoyalS (not verified)

More than 16 % is too large volume for zorkofonology aspekt, but the history make all again.
http://www.youtube.com/watch?v=KGwjXujl5zM&feature=related

Sun, 2011-09-18 17:36 — mike555

@Matt

There's no point me explaining again, I've already done so, everyone can see it.

Wed, 2011-09-14 18:50 — mike555

With unemployment on the up and peoples finances under pressure it would be hard to imagine anyone would want to inflate house prices even more, even though they're already well overpriced and at the root of this mess.

I don't suppose our population growing repidly will help either.

Fri, 2011-09-16 20:44 — matthew fox (not verified)

Mr Divine, my, my your very touchy.

Then again if your working with a limited vocabulary.

The odd thing is Bozo555 whines about insults but tolerates bad and abusive language.

I live for the day Bozo555 practices what he preaches.

Wed, 2011-09-14 19:12 — Phil Daniels (not verified)

The Chancellor may believe in 'No pain, no gain,' or something similar. For most people, pain indicates that something is wrong - and, in spite of his protestations to the contrary, Osborne's stubborn Plan A is destructive.

Wed, 2011-09-14 19:31 — Decimus (not verified)

Hi David

Is there a good list of fiscal stimuli the government could undertake it were so minded and an estimate of the multiplier effect on GDP anywhere online?

Wed, 2011-09-14 19:43 — matthew fox (not verified)

Unemployment is not just up, it is up again.

Last month, Gideon decided to throw 30,000 on the scrapheap.

The root of the mess is pretty straight forward, the 2010 emergency budget, since then, borrowings have and will increase, business & consumer confidence has collapsed.

House prices have been in declined, the whole of 2010, into 2011 and August showed a decline of 1.2%, with a year to date decline of 2.6%

Fri, 2011-09-16 23:00 — matthew fox (not verified)

Bozo555, not your funny, your tragically inept.

House prices fell by 16.2% in 2008

House prices fell by 3.4% in 2010, so all this garbage about prices falling " slightly " doesn't hold any water at all.

Thu, 2011-09-15 19:13 — swatantra

The question Danny asks is rather like asking Who wrote Beethovens Fifth.
The figures show unemployment.
Can we avoid that word and speak about 'employment' and 'Job Seekers'.
I thought we did away with UB 40 years ago.
Lets be more positive, then we can get more people into work.

Wed, 2011-09-14 21:01 — Indu Pendent (not verified)

Four points

- UK industry losing jobs is very bad. Once jobs are lost they tend never to come back. I'm infavor of strategically supporting key industrial businesses e.g. steel which needs help to keep the furnances hot when not in use
- Public Sector jobs going is good for the economy (sorry, but it has a long term benefit)
- Loss in other sectors is neutral (banking and services are fickle and follow demand around so recover easily)

- The major silver lining: high unemployment is accelerating the downward trend of wages which is making the UK more competitive. This is the solution to our problems.

From what David writes it looks like wage costs are falling relatively by 3% per year which is still low. It means that household discretionary income is falling so the trade deficit should fall which cushions the impact on the economy.

A major problem is that Public Sector pay and benefit are running ahead of the private sector so the State is getting relatively more expensive to keep going. Its not sustainable.

Sat, 2011-09-17 00:33 — Indu Pendent (not verified)

@matt

Foxy, thats not very polite - ignoring my question.

Here is the rub, what do you think:
- Ed "theoretically the leader" has taken sides against the unions. It is the first act or real leadership he has shown and should be commended for it. The international community supports his position so do most voters.

- Ed (swaggers in a starched uniform) is making borrowing noises to sway voters and win support from the public sector. He is already backed by the NUT and UNISON bosses and a majority of the grass routes.

So, which Ed do you think is going to win the party leadership race - the naive fresh out of posh school debating club Ed or the ruthless killer with form?

Think about it Foxy then answer my question.

BTW if the UK loses the AAA it will cost the government an extra £80Bn per year in interest charges. Does your friend Balls care?