The latest labour market figures from the Office for National Statistics shows that for September to November 2011 the employment rate for those between the ages of 16 and 64 fell 0.1% to 70.3%.

But the number of people in employment aged 16 and over (no age cap) rose by 18,000 on the quarter to 29.12 million with a fall in the number of employees of 109,000 to 24.79 million. The increase in the number of the self employed by 101,000 to 4.12 million may go some way in explaining this apparent disparity.

Those in full time employment fell by 57,000 to 21.26 million but the number in part time employment rose by 75,000 to 7.86 million.

The ONS puts the number of people in part time employment because they cannot find full time work at 1.31 million, up on the quarter by 44,000.

The unemployment rate was also 8.4% of the economically active population, which is the highest since 1995 and the actual number of unemployed people at 2.68 million is up 118,000 on the quarter and the highest total since 1995.

At 1.13 million unemployed, women have the highest unemployment figure for 24 years.

But overall, unemployment is still lower than it was in 1992 according to the ONS video.

At 9.29 million the number of economically inactive people between 16 and 64 was 61,000 down on the quarter. The reasons being, says the ONS, that fewer women were looking after the family home (-44,000) and fewer people retired under the age of 65 (-34,000).

Both the private and public sectors saw slower pay growth with total pay including bonuses up by 1.9% over the year. That compares with an annual CPI inflation of 4-5% and RPI inflation at about 5%.

Saying that the overall economic position looked weak reinforcing their view that more Quantitative Easing was likely Nadi Ali, economic adviser to the Ernst & Young ITEM Club, commented:

These figures are a continuation of the trends we've been seeing over the last few months, with unemployment on both measures increasing. Economic growth has been very weak for the most part of the last twelve months and is simply not sufficient to prevent unemployment from rising.

As with previous data releases, there are some inconsistencies. The rise in employment over the three months to November looks suspicious, particularly given that this was driven by a surge in the number of self-employed people. The decline in full-time employment looks like a more realistic picture of the health of the labour market.

Although December's rise in the claimant count was small compared to previous months, we would be wary of deriving too much comfort from that. Recent changes in the eligibility criteria for claiming Jobseeker's Allowance means that interpreting month-to-month changes is very difficult.

The earnings figures were extremely weak as well. Even though the inflation rate is set to continue easing over the course of this year, pressures on household finances will ease very slowly.

Overall, the outlook for the labour market is pretty dismal. The descent back into recession will make it increasingly difficult for firms to maintain headcount, adding to the upward pressure on unemployment coming from further public sector cuts. We expect the number of unemployed people to hit nearly 3 million next spring, representing 9.3% of the work force. What’s more, these numbers could be even worse, if one of the more negative outcomes of the Eurozone crisis were to materialise, or if the recent weakening in the outlook causes firms to cut back more aggressively.

Job Centre - Basher Eyre

Job Centre - Basher Eyre

Image: Basher Eyre [CC-BY-SA-2.0], via Wikimedia Commons

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