Encouraging Job Figures Provide Hope For The Economy
18 July 2012 in Chamber News
• In the three months to May 2012 unemployment fell by 65,000 compared with the previous quarter, while employment rose by 181,000
• Youth unemployment fell by 10,000 but remains above one million. The number of people unemployed for over two years rose by 18,000, to its highest figure since 1997
Commenting on the labour market figures published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:“The latest employment figures are encouraging following recent pessimism about the UK economy. But some causes for concern still remain. The number claiming jobseeker’s allowance is up slightly, the increase in the number of people unemployed for more than two years is worrying and youth unemployment remains high. Nevertheless, it is clear that the private sector is creating jobs while public sector employment is shrinking.
“These figures highlight the puzzling contrast between continued growth in jobs and the decline in GDP, which is being reported by the ONS. Although economic growth remains weak, it is difficult to believe that the economy has been in recession since the final quarter of 2011. Although many commentators expect the ONS to announce a third consecutive decline in GDP next week, it is important to sustain confidence.
“But many uncertainties lie ahead. Continued difficulties in the eurozone create challenges for our exporters at a time when austerity measures are putting downward pressure on domestic demand. Unemployment is likely to increase further over the next twelve to eighteen months, but the peak will probably be lower than the 2.9m figure predicted in our latest forecast. These positive job figures must be supported by important policy measures, such as more deregulation and creating a state-backed business bank to help businesses drive recovery.”