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 CIPD PRESS RELEASE 17 September 2008
WORST SET OF JOBS FIGURES IN A DECADE WITH 'AVALANCHE OF REDUNDANCIES'
IN PROSPECT
The latest set of official labour market figures
published today by the Office for National
Statistics (ONS) show the worst deterioration
in the UK's underlying job situation for at
least a decade. The figures confirm forecasts
made by the Chartered Institute of Personnel
and Development (CIPD) at the start of the year.
John Philpott, Chief Economist at the CIPD,
warns that the economy is increasingly likely
to experience an avalanche of job losses in
the coming months.
Dr Philpott commented as follows:
"With horribly bitter timing this extremely weak
set of job figures - which we expected but hoped
not to see - has arrived in one of the gloomiest
weeks of economic news for a long-time.
"A significant drop in job vacancies and a sudden
large jump in the vacancy rate underlies a fall
in the number of people in work and surge in
joblessness. There are not only more people
unemployed and looking for jobs but also more
economically inactive and outside the workforce.
Most worrying of all, more of the jobless are
suffering long-periods without work; a trend
that looks set to worsen with the number of
vacancies falling so sharply.
"But today's bad jobs figures will not be the
last. The official snapshot shows that the jobs
situation worsened in the summer months - CIPD
surveys of employers' recruitment and redundancy
intentions show that the demand for staff has
weakened further into the autumn and will continue
to do so as the economic downturn bites. Monthly
inflows to claimant unemployment - an important
leading indicator of the state of the economy
and jobs market - are rising sharply. And with
business confidence diminishing almost by the
day it is becoming clear that more and more
#employers are readying themselves for further
job cuts. This greatly increases the chances
of what earlier in the year we warned might be
an autumn and winter 'avalanche' of redundancies
which would propel the unemployment rate back
over 2 million in 2009 and leave more than 1
million in the queue for Jobseekers Allowance.
"Despite all the doom and gloom in the City, today's
figures indicate that the jobs crunch in the
summer months hit hardest in construction and
shops, hotels and restaurants - parts of the
private sector directly affected by the housing
market slowdown and reduced consumer spending.
The public sector, by contrast, registered a
surprise increase in jobs, although the jobs
outlook is at best flat for the public sector
too.
"In a break with recent trends, middle-aged people
and those up to state pension age appear to have
borne the brunt of the fall in employment. This
may signal that despite the introduction of age
discrimination legislation older people might
still be those more likely to accept voluntary
redundancy or be hit by compulsory job cuts.
"The only bright spot in today's labour market
figures is that growth in average earnings remains
very subdued against a background of a serious
squeeze on household incomes as a result of the
recent big rise in the cost of living. Given the
current state of the jobs market, employees in
general simply aren't capable of securing
inflation matching pay rises. The spectre of a
'pay-price spiral' is therefore clearly
exaggerated which offers greater hope that the
Bank of England will make an early cut in interest
rates to head off the risk of a prolonged recession."
Notes to editors:
* John Philpott is available for interview.
* The Chartered Institute of Personnel and
Development (CIPD) has over 130,000 members
and is the leading professional institute for
those involved in the management and development
of people.
CIPD press enquiries:
Robert Blevin / Gregor Ridley /Jemma Walsh / Christian Zarro
mailto:press@cipd.co.uk
http://www.cipd.co.uk/press
020 8612 6400 / 07793 256 763
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