Fall in unemployment masks big drop in part-time jobs for women

June 2007

The latest Office for National Statistics (ONS) labour market figures show a small fall in unemployment on both official measures. But according to Dr John Philpott, Chief Economist at the Chartered Institute of Personnel and Development (CIPD) a closer look at the latest ONS figures suggests that labour market conditions softened in the spring with women in part-time jobs, people aged under 25 and the over-50s bearing the brunt of a slight dip in demand for staff.

Dr Philpott comments:

"The UK jobs market seems to have taken a breather in the spring, though this is not clear from the headline unemployment figures. The total number of people in work fell (as did the employment rate) but this does not show up as higher unemployment because the dip in demand mainly affected women employees working part-time (the number of whom dropped by 60,000) many of whom left the jobs market to join the ranks of the so-called economically inactive. This withdrawal makes conditions in the labour market appear somewhat healthier than they actually are.

"An oddity in the latest ONS figures is evidence of a relatively large quarterly shake-out of women employed in two traditionally male dominated sectors of the economy, manufacturing and construction. But women are also likely to have been relatively adversely affected by a further fall in employment in the public sector where women account for around two-thirds of the workforce. The dip in demand for part-time staff may also explain why the labour market position of younger workers (aged under 25) and older workers (aged 50-64) seems to have deteriorated slightly in the early part of the year.

"On a more positive note the currently less than fully robust jobs market continues to keep pay pressures in check. There is still no sign that pay inflation will soon pose a serious upside threat to price inflation - though this alone may not prevent another interest rate hike."

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