Today’s monthly UK employment figures for November were seemingly encouraging, revealing far fewer jobless claimants than expected, whilst the UK unemployment rate avoided a further rise and remained at 8.3%. The UK now has 2.64 million unemployed.
Only three thousand people were added to the jobless list, against expectations of a sixteen thousand increase. This is positive but figures such as these do little to change the overall picture of a gloomy economic outlook here in the UK.
On the face of it, the figures suggest that the labour market may not be as bad as anticipated moving forward. However, we still believe conditions in the labour market will continue to deteriorate looking ahead to 2012.
Government austerity measures are taking their toll on employment numbers and will continue to do so for many months to come. The private sector is failing to pick up the slack left by private sector cuts and the picture for UK youth employment is looking very poor indeed, with the figure alarmingly up at 20%. Wage growth is also down, which is no surprise, but at least consumer inflation is coming down (down to 4.8% in November).
The risks of another UK dip into recession are ever-increasing and today’s employment numbers do little to indicate otherwise. UK households will remain under pressure over the next year and circumstances are could well worsen before they improve.
Richard Driver
Analyst – Caxton FX
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