Drop in short-term unemployed as JSA count falls

Today’s unemployment figures – showing a rise of 43,000 people looking for work – underlines that the jobs market remains fragile as the economy emerges from the recession. In the quarter to January, the number of people in employment also fell by 89,000. Vacancies are up and redundancies down, but demand for labour remains weak.

More positive is that the number claiming Jobseekers Allowance fell again in February, by nearly 33,000. This is the fourth monthly fall in the last five months.

The total is falling because the number of people leaving JSA rose to 344,000 last month (the highest since the start of the recession) while the number newly claiming fell to 309,000 (well below the peak of more than 360,000 a month this time a year ago).

There has, rightly, been a lot of focus on youth unemployment during this recession. But thankfully the number of 18 to 24-year-olds who were unemployed remained static during the last quarter, despite the overall level rising, while the number claiming JSA fell by 12,000.

It is worth noting that 261,000 of the young people classified as unemployed on the ILO measure are actually in full-time education, but looking for some work on the side.

Actually the largest fall in employment was among those aged 35-49 (down 69,000). The encouraging numbers on youth unemployment suggest the government’s guarantee of a job or training for young people is making a difference. Labour are right to pledge to extend this to anyone out of work for two years.

Looking beneath the headline figures, it is significant that there has been a drop of 46,000 in the number of people unemployed for under six months, but an 89,000 increase in the number out of work for more than a year. These divergent trends are an important reminder that labour market analysis is as much about durations as totals.

The first figure suggests that jobs are becoming easy to come by for the newly unemployed; the latter that the risk of long term detachment from the labour market is the biggest challenge – and the legacy from this recession that we must avoid.

Finally, buried deep inside a recent IMF report into unemployment dynamics during the recession is a chart that suggests the UK has seen the greatest gap between the predicted rise in unemployment and what has actually happened, compared with a set of leading developed countries, reported by Left Foot Forward earlier today.

This figure chimes with the 500,000 or so difference between the level of unemployment predicted in the 2009 Budget and what has happened since. Having said that, unemployment remains too high – and today’s rise shows we remain a long way from being out of the woods.

UPDATE 16.40:

Iain Dale has been skewered by the Freethinking Economist Giles Wilkes. This morning, Dale wrote a piece titled, “Unemployment is Always Higher Under Labour”

But illustrated by a pretty picture, Wilkes writes a riposte titled “Iain Dale’s Misleading Fact of the Day” and says, “Let’s look at the Claimant Count as a simple measure: My rough averages say:

“Conservatives since the War have averaged a claimant count of 1.56 million.  The Labour party: 900 thousand.”

Glad we cleared that up.