Until recently we could say that while we might not have known why, at least the news on jobs was good. The UK economy was crawling along but employment was rising; unemployment falling. It may have been hard to explain why it was that despite the UK having all those extra jobs, it wasn’t producing much more, but at least the jobs were being created.
The latest data makes a bit more sense, alas for the wrong reasons.
Delayed data on UK unemployment indicates a 70,000 rise over the three months to the end of November, taking total unemployment to 2.56 million, or 7.9 per cent.
The employment rate for those aged between 16 and 64 was 71.4 per cent, which was virtually unchanged from September to November 2012 but up 0.9 percentage points from a year earlier. There were 29.70 million people in employment aged 16 and over, down 2,000 from September to November 2012 but up 488,000 from a year earlier.
Okay, so the employment data does not look too bad. It seems much of the rise in unemployment was down an increase in the size of the work-force as more women who had previously been looking after their children/home joined the labour force, or so says the ONS.
But looking at the employment data again, the fact is that while the fall in total employment was quite small, it was the first recorded fall since 2011.
So the dilemma may no longer apply. It is no longer necessary to ask how it is that the UK economy is barely growing when employment is rising. Instead we might ask: how on earth we are going to get both GDP and employment up? The paradox has gone, the problem remains.
© Investment & Business News 2013