Much worse than expected labour market figures have reinforced fears that economic recovery could falter in 2011, experts have warned.

 
According to the Office of National Statistics, unemployment rose by 35,000 to 2.5 million in the three months to October – the period before Chancellor George Osborne announced details of his spending cuts and VAT tax hike and even before such measures have fully kicked in. One in three have now been unemployed for more than a year.
 
Youth unemployment hit almost record levels rising by 28,000 to 943,000 or 19.8% and the number of available full-time positions fell, with 1.16 million part-time workers now unable to find full-time work and almost 600,000 temporary workers (the equivalent of two out of five) unable to get a permanent job.
 
Despite government hopes, there was also no evidence to suggest that cuts in public sector posts were being replaced by private sector job creation. Employment in the public sector dropped by 33,000 to just over 6 million, while the number of private sector jobs remained flat at 23.11 million.
 
Minister took some comfort from a drop of 1,200 to 1.46 million in the benefit claimant count and a 1,000 increase in the number of job vacancies to 468,000, but Prime Minister David Cameron admitted that he was concerned about the weakness of the labour market.
 
John Philpott, chief economic advisor at the Chartered Institute of Personnel and Development, said: “The latest job market figures are much worse than expected and the opposite of what was wanted in the run-up to Christmas, with no joy and very little comfort on offer.”
 
It was especially disappointing to see the positive momentum that had built up earlier in 2010 appear to run out of steam even before the full impact of the coalition government’s spending cuts and tax hikes took effect, which did “not bode well” for 2011, he added.
 
Manufacturing, which was previously at the forefront of the export-led economic recovery, was still downsizing and was now joining construction as one of the sectors set to bear the brunt of public spending cuts, Philpott said.
 
The Institute of Directors was equally concerned. Graeme Leach, the organisation’s chief economist, said: “The labour market looks very flat and doesn’t fill us with confidence about the pace of economic recovery. The softening in the labour market reinforces our message that economic recovery will weaken in 2011.”