Last month’s Labour Market Statistics report from the Office for National Statistics (ONS) showed the headline rate of unemployment hitting 8.4%, its highest level since 1995.
But the ONS report also appeared to bring some good news for Osborne.
Private sector job creation appears to overtake public sector job losses
Private sector job creation could finally be starting to overtake the rate of public sector job losses. This is one of the key planks of ‘Osbornomics.’
“The number of people employed in the public sector fell by 37,000 between September and December 2011 to reach 5.94 million, the lowest figure since June 2003. The number of people employed in the private sector increased by 45,000 on the quarter to reach 23.17 million.”
Blanchflower: ‘Net job creation was negative’
However, these figures may not ultimately prove as positive as they first appear:
- ONS does not appear to report whether these new jobs in the private sector are full-time or part-time. Overall, numbers of part-time workers are on the rise. There were 7.88 million people in part-time employment over the three months to January 2012, a rise of 59,000.
- Economist David Blanchflower argues that a closer analysis of the data (from the time when the Coalition Government’s policies began to take hold) suggests that “the private sector is not generating the jobs to offset cuts in the public sector.” Blanchflower says: “The public sector job cull meant that net job creation was negative, of the order of -44,000. I have no idea how anyone in their right minds could interpret this as good news.”
- XpertHR economic commentary April 2012: Not out of the woods yet XpertHR’s April 2012 economic commentary looks at the risk of double-dip recession, trends in unemployment, and predictions for private sector pay awards.