This month’s labour market data contains many fewer surprises than the large deterioration revealed in last month’s figures.
It is true that unemployment in the three months to October was much higher than in the three months to July. But despite many news outlets reporting this as a fresh rise in unemployment, much of this increase was revealed in last month’s data. When comparing the unemployment rate for the three months to September to the rate for the three months to October there was no change – the unemployment rate remained at 8.3 percent.
Such a stabilisation is likely to be only a brief respite. Forward looking indicators, such as the Report on Jobs, suggest that the demand for workers is deteriorating. Given that the outlook for the UK economy is weak and public sector jobs losses are likely to continue there are likely to be further increases in unemployment in the coming months.