Hurting not Working? Job figures and growth forecasts paint a two-sided picture

This week’s parliamentary recess means that Prime Minister’s Questions is rescheduled for seven days time.

Following on from a Nick Clegg mauling of Harriet Harman, this week would have made similarly combative viewing. Given the positive economic data released by the ONS this morning Labour would have done well to avoid sharpened Tory arrows. If current trends continue, Labour’s ‘Hurting not Working’ mantra will be in need of a grammatical tweak.

In an economic crisis that refuses to end, any positive figures, however paltry, are likely to be jovially applauded, by the coalition anyway.

Although no politician will make the schoolboy mistake of prematurely predicting recovery a la Norman Lamont’s ‘green shoots of recovery’ gaffe just yet, the small signs are there for a cautious, tentative optimism to begin emerging.

The number of people out of work has fallen to 2.51 million, the lowest total for 12 months.

Building on the UK’s recent return to growth of 1% in the third quarter of this year, the jobless figure fell by 49,000 in the three months to September.

The unemployment rate was down 0.2% to 7.8% compared to the Eurozone’s 11.6% average. The same figure is a 0.4% improvement on November 2011 which means an additional 110,000 are now working when compared to a year ago.

The inactivity rate, which measures the proportion of the population not in the labour force, was 22.6%, down 0.7% on a year earlier. There were also 9.07 million economically inactive people between ages 16 to 64; this figure is down 25,000 on Q2 and 285,000 down on a year previous.

Don’t break out the Bolly just yet.

The ONS also revealed that the claimant count had risen by 10,100 to 1.58 million, the highest figure since July.

A rise in food prices and the trebling of tuition fees has been blamed for a 0.5% increase in inflation to 2.7% this October.

During a speech at the Bank of England’s quarterly Inflation Report the UK’s growth figures for 2013 were cut from 2% to 1% due to ‘continuing global economic fragility’.

‘The period of weak demand has been accompanied by stagnant productivity, raising questions about the extent to which the supply capacity of the economy has expanded. Increases in energy and other import prices and in VAT have meant that CPI inflation has been well above its 2% target for this period.’

In addition, the quarterly report does not expect inflation to fall to its 2% target until mid 2013.

Sir Mervyn King also warned that growth from quarter to quarter would continue to serpentine with output growth likely to fall abruptly during Q4.

Today’s figures are nothing short of a mixed bag. The most obvious positive being that more people are managing to find employment as the jobless figure continues to plummet. This endless crisis has ingrained an air of caution in most of us and there is always a need to be as realistic as can be.

Despite this, the continuation of current trends will provide positive news for David Cameron and the Conservatives. Improving job figures and a return to viable economic growth will go a long way toward convincing the electorate that the party forced to make some difficult decisions indeed made the correct ones.

The re-election of incumbent Barack Obama will also give Cameron some comfort; the US jobless figures and weak growth forecasts could have buried Obama had a more competent challenger stepped up to the plate. With weak yet encouraging economic data and an opposition leader that also fails to inspire, David Cameron will be confident of matching President Obama’s opportunity of a second term in office.

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