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Comment on the latest ONS labour market statistics

14 July 2010

For immediate release: 14 July 2010

Knowledge economy leading jobs recovery, according to The Work Foundation.

Commenting on today’s ONS labour market statistics, Ian Brinkley, associate director of The Work Foundation said:

“The labour market showed a welcome and encouraging return to growth comparing the three months March to May with the previous three months. The increase in employment was enough to drive the unemployment rate down from 8% to 7.8% (ILO definition, all who looked for work in past four weeks and who were able to start a job in two weeks time).

New job generation was strongest in the private knowledge intensive services sectors, while manufacturing and construction continued to shed jobs. Professional, scientific and technical services; arts, entertainment and recreational services; and business support and property services expanded by 187,000 jobs in the three months comparing December 2009 with March 2010. In contrast manufacturing and construction lost 114,000 jobs, while distribution and transport lost 60,000.

The headline figures disguise some less encouraging trends. Most of the increase has been in part-time and temporary jobs, with many people taking temporary work because they cannot find a permanent job.

Fears of a double dip recession cannot be dismissed just yet. The labour market still has not felt the effect of public sector job cuts on a significant scale. Overall, the number of people in public sector employment excluding the publicly controlled banks had not yet fallen in the three months to March. Nor have we seen the full impact of the rundown in construction work and this sector is now shedding jobs at an accelerating rate.

Much will depend on whether the jobs recovery in knowledge intensive services can be sustained and accelerated before the impact of public spending cuts feeds through into reduced numbers directly employed by the public sector and by firms who depend on large orders from the public sector.”

Ends
Notes to editors

ILO unemployed includes all those who sought work in the last four weeks and are able to start a job in two weeks time. The much less comprehensive claimant count measure showed a further fall in May, widening the already considerable gap between these two measures of unemployment. Unemployment using the ILO measure and total employment are both increasing because the working age population is going up and new job seekers are still entering the labour market.
Ian Brinkley is available for interviews and briefings.
The Work Foundation is the leading independent authority on work and its future. It aims to improve the quality of working life and the effectiveness of organisations by equipping leaders, policymakers and opinion-formers with evidence, advice, new thinking and networks. www.theworkfoundation.com.


Media enquiries:

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