It was amusing to watch premature headlines such as “Jobless rate soars to 2.5 million” swiftly amended this morning, after new figures showed that unemployment has actually fallen by 7,000 to 2.46 million.
This time last year, most economists were predicting that unemployment would hit three million by early 2010, so clearly the government’s fiscal stimulus has had some effect. The much-derided VAT cut, for instance, is estimated to have raised real consumption by 1.2 per cent.
Labour can plausibly claim that this would not have been the case had the Tories been in power. Will Hutton recently calculated that under a low-spending Tory government, nearly half a million more people would have lost their jobs.
The government can also point out that the labour market has begun to recover more quickly than in previous recessions. Labour has published a new interactive map showing how unemployment is lower in every region compared to the recession of the 1990s.
It isn’t all good news for the government. The number in full-time employment fell 113,000 to 21.2 million in the three months to November, while those in part-time jobs grew by 99,000 to 7.7 million. Moreover, the number of economically inactive people, including students, the long-term sick and the retired, has reached a record high of 8.046 million.
All the same, Labour can probably expect a modest poll boost as economic confidence increases. But the argument that the government prevented the recession from turning into a depression is not, as Barack Obama is finding, one that will necessarily resonate with voters. While the electorate blames governments for economic failure, it rarely credits them with recovery.