What's good about the employment data?

When the latest unemployment figures came out, they were welcomed as good news by almost everyone. But look a little deeper, and there are some truly hideous numbers.

When the unemployment numbers for the UK came out this morning they were welcomed as good news by almost everyone.

And in a way they were the headline number had it that total unemployment for the three months to November stood at 2.46m. That's 7,000 down on the previous number, making the rate of unemployment a mere 7.8%.

But look a little deeper and the headline number covers up some truly hideous figures. The number of full-time jobs fell by 113,000, while the number of part-time jobs rose by 99,000. There are now 7.71m people working part time. More than a million of those say they are only doing so because they can't get full-time jobs. That's the highest figure since 1992, and while we can't class this one million as unemployed, they are certainly under-employed.

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More bad news comes in the fact that the workforce is getting paid less in real terms: average weekly pay rose a mere 0.7%. Even worse than this number is the percentage of working-age people who are not employed, but not looking for work either: 21.1%. So more than one in five of the working age population is economically inactive. That's 8.05m people. Sure, some will be retired hedge fund managers and the like but not all of them: a good many more will have fallen out of the official unemployment statistics simply because they have stopped actively looking for work (presumably because there isn't any).

Overall 14,000 fewer people had jobs than in the previous period. I can see why the fact that things aren't even worse is nice. But on the other hand, it's hard to see how the fact that fewer people have jobs than they did, and that those who do have jobs are getting paid less, can be spun as good news. That's particularly the case given that UK unemployment is even now still being cushioned by the public sector: between the third quarter of 2008 and the third quarter of 2009 the heart of the recession so far public sector employment rose by more than 90,000.

But this can't go on. Public sector cuts are coming, and when they get here, jobs will go. So what will the unemployment numbers look like this time next year?

Unless we really do see a miracle recovery in the private sector (and the signs of one are pretty limited so far) the answer is not good at all. The government might not want to recognise this but the UK's workers clearly do. If they didn't, they wouldn't keep accepting the low pay and shorter hours that make them cheaper and cheaper, allow their employers to keep them on and keep the official figures looking less bad than they really are.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.