At the same time over 250 businesses have now committed to working with government to form Local Employment Partnerships (LEPs), helping those longer term benefit claimants move off welfare and into work.
The number claiming unemployment benefit fell for the fourteenth month in a row to reach its lowest level for over thirty years. More long-term benefit claimants can fill some of the 680,000 job vacancies.
A decade ago too many people were being written off, their talents wasted and skills ignored.
This month’s labour force survey covered August to October 2007. The claimant, unemployment and vacancy count dates were 8th November and 2nd November respectively.
Employment is at record levels: 29.3 million people were in work in August to October, the highest figure on record Employment rose by 114 thousand over the quarter and 226 thousand on the year The employment rate is 74.5 per cent , up 0.1 percentage points over the quarter, and unchanged for the year
The numbers on all the main out of-of-work benefits are falling: the claimant count was 813.0 thousand in November 2007, down 11.1 thousand on the month, and down 134.2 thousand on the year. It has now fallen for 14 consecutive months. in the year to May 2007, the number of people receiving incapacity benefits was 2.64 million, down 45 thousand on the year. The number has fallen in each of the last 11 quarters, and is at its lowest level for eight years. in the year to May 2007, the number of people receiving lone parent benefits was 766 thousand, down nine thousand on the year.
Despite the fall in unemployment, the Office of National Statistics (ONS) reported that wage pressures in the economy remained weak. Headline average earnings rose four per cent on the year in the three months to October, easing from 4.1 per cent in September and below forecasts for a rise of 4.2 per cent.
The Bank of England is concerned that the fall in the jobless will embolden wage bargainers to push for higher price increases to compensate for the rising cost of fuel and food, but new ONS figures showed no cause for BoE to be alarmed.
Earnings growth in the manufacturing sector crumbled to 2.5 per cent - a record low - as last year’s bonus payments were not repeated.The Bank’s rate-setting Monetary Policy Committee cut interest rates for the first time in two years last week amid fears that a collapse in consumer confidence would prompt a slump in economic growth.
Some economists are predicting that interest rates could fall to as low as four per cent as the Bank strives to keep inflation to its two per cent target.
Economic inactivity is down on the quarter: the economic inactivity level is 7.96 million, down 16 thousand on the quarter, but up 111 thousand on the year. the economic inactivity rate is 21.2 per cent, down 0.1 percentage points on the quarter, but up 0.2 percentage points on the year. excluding students, inactivity as a proportion of the working age population is unchanged over the last year, at 16.1 per cent .
Vacancies remain very high and redundancies are very low:
- ONS’s vacancy survey estimates an average of 680.7 thousand unfilled vacancies in the three months to November 2007, up 14.5 thousand on the quarter, and up 81.1 thousand on the year
- More than 10,000 vacancies are placed at Jobcentres every working day and at least as many again come up through other recruitment channels
- There were 132 thousand redundancies this quarter, up 11 thousand on the previous quarter, down eight thousand on the previous year and close to the lowest level since comparable records began in 1995.
Earnings growth in the year to October was 4.0 per cent, down 0.1 percentage points from September: - excluding bonuses, average earnings growth was 3.6 per cent, down 0.1 percentage points from September figure.
The Guardian on Wednesday published a number of experts reactions to the ONS Labour Survey Report:
Geoffrey Dicks, economist at RBS, said manufacturers seem to be holding down earnings to offset higher energy and raw material costs.
”The demand for labour held up quite well with the unemployment rate lower and employment rising. Overall the benign combination of a tightish labour market on the demand side but no obvious pressure on earnings.”
Howard Archer at Global Insight said the benign earnings data would provide relief for policymakers at the Bank of England who have been concerned that strong pay growth may feed inflation pressures in the economy.
”(Average earnings) are substantially below the 4.5 per cent level considered consistent with the Bank of England’s two per cent target for consumer price inflation. Despite a further tightening in the labour market, there still appears to be sufficient slack to limit workers’ bargaining power.”
Vicky Redwood, economist at Capital Economics, said the absence of any price pressures arising from pay growth should allow the Monetary Policy Committee to cut interest rates in response to weakening economic growth.
James Knightley at ING said the labour report was a “mixed bag” with unemployment falling but wage growth soft. However he said: “With downside growth risks intensifying, there is the threat that the unemployment rate will move higher once again through 2008.”
George Buckley at Deustche Bank echoed this sentiment, saying he was unsure how long the combination of low unemployment and weak earnings growth could be sustained. “A weaker jobs market next year looks likely,” he said.Philip Shaw at Investec said the figures did not point to any inflation problem within the labour market.