Official labour market statistics out today show that the unemployment rate has fallen to its lowest levels since records began twenty years ago in 1984; the CIPD warn, however, that the rosy figures mar the record numbers of economically inactive people and soaring rates of long-term sickness levels.
The unemployment rate has fallen to 4.6%, down from 4.8% the previous quarter to reach 1.38 million but despite these findings the downward trend in the claimant count appears to have levelled off.
The number of people in employment increased by 55,000 over the quarter and by 232,000 over the year, to reach 28.43 million another all time high.
Job vacancies are down by 9,900 on the previous quarter but up 43,300 over the year while redundancy rates are down to 5.5 per 1000 employees since last quarter when they stood at 5.9.
Overall, average hours worked per week were virtually unchanged on the previous three months, at 31.9 hours.
The annual rate of growth in average earnings (the AEI), excluding bonuses, was 4.3%, unchanged on the previous month. Including bonuses, the AEI was 3.7%, down from 3.8% the previous month.
The inactivity rate for people of working age increased slightly to 21.5% for the three months ending in September 2004.
John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD) commented:
“Despite the good news on jobs, the number of economically inactive people – those without jobs and not looking for work – continues to rise to ever higher record levels, reaching 7.9 million.
“The Government can take some comfort from a new seasonally adjusted data series – published today for the first time – which shows that the rise in the economically inactive population in recent years is being driven primarily by an increase in the number of students rather than people likely to be receiving welfare benefits.
Long-term sickness rates are also a cause for concern said Philpott who said:
“The number of people classified as long-term sick remains very high at over two million and has increased by 60,000 in the past year. The Chancellor must use next month’s pre-Budget statement to set out specific proposals for helping more long-term sick people into work, including changes to the benefit system that encourage people on Incapacity Benefit to participate in the jobs market so that they become visible to prospective employers.”