Jobs market still fragile despite record quarterly growth in employment, experts warn

The jobs market remains fragile despite employment growing at the fastest rate since records began in the three months to July, industry experts have warned.

Office for National Statistics figures today revealed that employment for the quarter rose by 286,000 to 29.16 million, this 0.4% rise in the rate to 70.7% representing the biggest quarterly rise since 1971.

The increase in total employment was mainly driven by part-time workers, the number of which increased by 166,000 on the quarter to reach 7.93 million. The number of full-time workers increased by 121,000 to reach 21.23 million, more than offsetting the 22,000 drop in public sector jobs.

However, Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, warned that “this mini jobs boom is unlikely to last”.

“This is partly because the rise in employment was probably boosted by a one-off unwinding of the recruitment freezes introduced in much of the private sector during the recession,” he said. “And with many businesses still operating below capacity having hoarded labour in the downturn it may require a much stronger and sustained economic recovery to maintain hiring rates.”

While the latest figures will give “considerable heart” to those who believe the private sector will be capable of making up for the 600,000-700,000 planned public sector job cuts, “it is far too soon to rule out a renewed rise in unemployment once the cuts really start to bite”, Philpott added.

While the employment figures were generally strong, with growing employment and a small fall in the broader measure of unemployment, there remain reasons for concern, according to Nigel Meager, director of the Institute for Employment Studies.

“The rise in claimant unemployment in August, although modest, is an unwelcome reminder of how fragile the labour market remains,” he said. “And, as the most up-to-date indicator of what is happening, it suggests a weakening picture.”

Ian Brinkley, associate director at The Work Foundation, said the rise in the number of unemployed women – 50,000 joined the jobless ranks in the quarter – was worrying.

“Although over the recession as a whole the vast majority of job losses were for men, female unemployment is now starting to rise,” he said. “The underlying cause of this may be weakness in services employment compounded by job losses in the public sector starting to feed through into the labour market figures.”

TUC general secretary Brendan Barber said there was some good news in the employment figures, but stressed that the economy is still “extremely fragile”.

“With more than one in six young people without work, the best the Government can expect is a largely jobless recovery,” he said. “At worst the economy could go into reverse, as the OECD now recognises. The unemployment deniers in the Government need to accept their responsibility for blighting Britain’s young.”

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