November Labour Market Update

Young people made up the bulk of the increase in unemployment in the three months to September, with an extra 67,000 young people unemployed over the period.

Briefing published on 16 November 2011 by Paul Swinney

The release of this month’s labour market statistics show that the labour market continues to deteriorate. Unemployment increased by 0.4 percentage points in the three months to September relative to the previous quarter, while the employment rate fell by 0.4 percentage points.

There now appears to be a second wave of unemployment that is hitting the UK economy.  The trend in unemployment in the current economic recovery has been very different to previous recoveries.  For example, unemployment continued to rise for around one year after the end of the early 1990s recession.  But unemployment stabilised very quickly after the most recent recession and remained broadly flat into 2011.

However, it now appears that this stabilisation may have only been temporary.  Recent rises in unemployment now mean that the unemployment rate has reached its highest level since 1996.  Weak economic growth and public sector job cuts could continue to push it higher in the coming months.