Data released from the Office of National Statistics show the jobless count to be up; while the CIPD warn that the worst is yet to come.
The claimant count measure of unemployment rose by 20,100 in July, reaching 864,700. The unemployment rate is now 1.67 million. This is the largest increase in a single month since 1992. At the same time, wage growth has weakened. Average earnings including bonuses were 3.4% higher in the three months to June in comparison to the same period last year.
John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD) said of the findings: “This is the weakest set of labour market data since the economic slowdown began. Employment growth has ebbed to a trickle – indeed employment has fallen in several regions of the country – while the rise in unemployment is gaining worrying momentum. The number of unemployed people claiming Jobseekers’ Allowance has risen in every month since January – with each monthly increase greater than the last – and there are now more people in receipt of this welfare benefit than a year ago.”
Philpott said that the impact of the economic slowdown is also becoming more widespread, with nearly every sector of the economy posting fewer job vacancies in the three months to June: “This is particularly evident in those parts of the private sector that until recently were major engines of job creation such as shops, hotels and restaurants, finance and business services, and construction. Moreover for the first time since the credit crunch emerged there is a clear sign that redundancies are on the rise.”
Tom Hadley, director of external relations at the Recruitment and Employment Confederation (REC), said that the statistics were concerning but that things needed to be kept in perspective.
“We have experienced almost unprecedented growth and demand for jobs over the last two years. Employers are right to be cautious in the current climate but feedback from recruiters and the latest REC/KPMG Report on Jobs is that employers are still hiring. Generally speaking, they know how important it is to hold on to talent when times are tough, not only to remain competitive, but also to avoid the repercussions that come with having to recruit talent back into the organisation when the market picks up.”
Earlier this week, HRZone.co.uk reported on findings from the latest quarterly CIPD and KPMG Labour Market Outlook survey, which found that employment prospects are weaker than at any time since the survey began four years ago with redundancy misery predicted for thousands.
