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Wednesday, 12 August 2009

Unemployment up 10% in the last quarter

The number of unemployed people has risen to 2.4 million, up by 220,000 in a month. I won't fall into the trap of saying that it is better than the 13.33% increase last month, because it is 10% worse. The fact is that the number of unemployed people has risen by nearly a quarter in 2 months, with a general expectation that it will hit 3 million that before it will get better.

In addition, the number of people actually employed fell by a record 271,000 in the three months to June. So that's 51,000 people who have emigrated, died or just disappeared.

In fact economists say that the rate of unemployment will not decline until the economy starts to fgrow at more than the long term inflation rate of 2.5%. But that is hardly likely to happen some time soon with government spending (currently making up 50% of the economy) likely to be held flat or cut. the rest of the economy would have to grow at Chinese rates to break 2.5%.

Ah but say the teenage scribblers, average earnings went up by 2.5% year on year, which is a hopeful sign for consumer spending. Not when the number of people in work is decreasing by more than 2.5% year on year. That means total spending power is decreasing.

Much was made yesterday of George Osborne's use of a quotation from a past speech by Gordon Brown, but he should have use this one from the same speech:

"When literally millions of people with talent and energy are denied the chance to realise their potential to the full, no minister can walk by on the other side. It makes me angry when I meet young people at 16 or 17, their life's chances crippled by unemployment and poverty.
Any fair-minded citizen moved to anger, would also be moved to action. A root-and-branch modernisation of the economy, with a new and reformed welfare state was the only way to achieve what we have always sought and what I affirm as our goal today: employment opportunity for all in every part of Britain. Full employment for the 21st century. The ambition of decent-minded people everywhere."

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