Unemployment Falls Amid Economic Uncertainty
“It’s great news that unemployment is continuing to fall and the hope must be that, with last month’s figures still fresh in the memory, we are beginning to see a trend moving in the right direction.”
Reacting to the news that unemployment has fallen by 45,000 between January and March, Bernard Brown, Partner and Head of Business Services at KPMG, says the public should be cautious about “blowing the dust off celebratory bunting just yet because, even for those who have found full-time employment, earning power for new starters remains well below pre-recession heights.”
“Continued economic uncertainty and volatile markets means that getting a job comes at a cost. Whilst the economy benefits through the use of skilled labour and a reduction in the number of claimants, there is still less in the way of discretionary income, and until this changes we are likely to find ourselves stuck in a vicious circle.”
The Office for National Statistics (ONS)figures showed that the number of unemployed fell by 45,000 between January and March, bringing down the rate by 8.2% to 2.63 million.
“It also remains a concern to see that employment figures amongst the young are so high. So much attention is focused towards prospects for – and the stimuli to drive – the economy, but the reality is that long-term sustainable growth will only be achieved if the job market is tackled at both ends of the spectrum.
“If we fail to do so, the cost of supporting people as they look for work, coupled with the frustrations of a generation lost to the workforce, will mean that the UK’s economy will stagnate for a long time after today’s figures are forgotten.”
The number of people in work rose by 105,000 to almost 30 million, fueled by a rise in part-time jobs. This has raised concerns over “underemployment” in Britain as workers are forced to accept shorter hours instead of full-time positions.
But economists warn that recession may return and knock business confidence, prompting job cuts in the year ahead.
“The figures could get worse. The return to recession will knock business confidence and prompt job cuts. While private sector employment is rising at the moment, overall the picture looks weak,” said Vicky Redwood, an economist at Capital Economics, as quoted by Bloomberg.