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Economy in Brief

UK "Claimant"-Based Unemployment Down, but Total Employment Sagging
by Carol Stone May 16, 2007

Employment in the UK fell by 1,000 in the February period, a third successive monthly decrease in this 3-month moving average. Over the last three months (the style of comparison that the UK's Office for National Statistics [ONS] generally emphasizes) employment was down by 55,000 and reached the lowest monthly level since last June. Notably, though, full-time work has held virtually steady October, and it is part-time work that has been cut.

The unemployment rate, measured by the ILO definition, has held flat at 5.5% since September, and in fact, with the exception of a 5.6% reading last August, has been 5.5% since last May, again using a 3-month moving average. The number unemployed has hovered close around 1.7 million. At the same time, the more popular unemployment gauge in the UK, the "claimant count rate", has edged lower. In April, this rate, reported as a figure covering just a single month, was 2.8%, down from 2.9% in March and 3.0% during nearly all of 2006.The number of "claimants" for April was 890,000, the first dip below 900,000 since October 2005. At least one press report today argued that the improvement in these latter jobless statistics would give the Bank of England room to raise interest rates in coming months to keep inflation down. However, another press service noted a modest slowing in earnings growth, which would limit the Bank's need to act.

Job vacancies suggest that the employment environment may do better. Reported vacancies amounted to 647,400 in April, up 20,000 from three months ago. The clearest gains appear in wholesale & retail trade, hotels and restaurants and in public services, such as health care. The financial sector is also on a steady, but more gradual uptrend. Manufacturing even has seen some increase. Thus, despite the flat pattern in the broad employment measure, these vacancy data point toward some improvement.

UK Labor Force Survey & Related Labor Data Jan 2007 Dec 2006 Nov 2006 Oct 2006 Year Ago 2006 2005 2004
Employment*
 
(3Mo Avg, SA, Thous)
-- -- 28,981 28,982 28,887 28,960 28,730 28,465
Chg from 1 & 3 Months Ago -- -- -1/-44 -40/-47 +8  
(MoAvg)0.3% y/y
0.8% 0.9% 1.0%
Unemployment Rate*  
(3Mo Avg, SA, %)
-- -- 5.5% 5.5% 5.2% 5.4% 4.8% 4.8%
Claimant Count  
(Monthly, Thous)
890.0 905.7 920.0 923.1 947.1 944.7 861.7 853.3
Claimant Count Rate (SA, %) 2.8 2.9 2.9 2.9 3.0 3.0 2.7 2.7
Vacancies (Monthly, Thous) 637.7 602.8 590.7 619.1 598.8 599.4 618.6 631.9
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