Public sector jobs help to drive unemployment down
Heather Stewart
Thursday March 20, 2003
The Guardian
ELMAT's comments: PB, this is the reason for the <<rising in public expenditure>>> more pseudo-jobs.
Further evidence emerged that Britain's economy is escaping the worst of the global downturn yesterday as the broadest measure of unemployment fell at its sharpest pace for two years.
Despite sliding equity markets and depressed world demand, official figures showed unemployment slid by 73,000 in the three months to January to 1,459,000 on the government's preferred labour force survey measure - a rate of 5%.
Analysts said the resilience of the labour market could help to offset the knock to consumer confidence from sharp declines in equity prices over recent months and the onset of war in Iraq.
"Despite growing jitters about the state of the economy and war in Iraq, near-full employment should help to cushion consumer demand in the near term," said Ross Walker, of Royal Bank of Scotland.
A meagre bonus round in the City seems to be preventing wage inflation from taking off as unemployment falls, with the headline rate of average earnings growth at 3.6% in the three months to January, down from 3.7% a month earlier.
Workers in the expanding public sector have seen the fastest growth in pay as the government struggles to recruit and retain enough staff to deliver its pledge of world-class public services. Headline public sector earnings growth was an inflation-busting 5% in the year to January, against 3.2% in the private sector.
The sharp drop in unemployment on the broad labour force survey contrasted with a slight rise in the number of people claiming jobseekers al lowance. Unemployment on this narrower, claimant count measure rose by 2,600 in February, to 935,300, a rate of 3.1% - the same as a year earlier.
Falling unemployment over the past year has disguised huge job losses in some sectors, according to the survey of workforce jobs, released by the office for national statistics yesterday. Manufacturing employment hit a record low of 3.56m in the three months to January.
The recession-hit manufacturing sector laid off 154,000 workers in 2003, as firms slashed output to cope with the downturn in international trade. The ONS said 47,000 jobs were lost in the hi-tech electrical and optical equipment sector as the collapse of the dotcom boom took its toll.
Yesterday's figures held out some hope for manufacturers, as they showed unit labour costs - the price in wages of producing a fixed amount of output - had fallen for the first time since March 2001, by 0.8% in the month.
Expanding public sector employment helped to soak up losses in manufacturing, with jobs in public administration rising by 153,000 over last year. |
