Unemployment ups and downs

In Britain the number of employed versus unemployed is not really a case of good news and bad news; it is more a case of not so good, but not too bad either.  The Office for National Statistics reports that total unemployment claims in April were less than those in March by 27,100, and by nearly 100,000 since late last year, when the number of claims reached a peak.

To some extent this will afford some relief for the government, as far as paying  unemployment benefits.  However, social security and benefits for incapacity are expected to continue rising.  There are a great many in the category of  ’economically inactive’ that includes people who cannot claim unemployment because they are physically unable to work, in school, or caring for family members.  While they do not add to the burden of unemployment claims, they are not earning and therefore not spending to boost the economy.

According to the ONS report, about half of the group who are old enough to enter the job market but not employed are students.  Of the 88,000 increase in the number of ‘inactive’ citizens, about 43,000 were students, and many of the rest have temporarily given up or withdrawn from the labour market and so do not appear as claimants for unemployment benefits.

In general, a falling unemployment rate is encouraging, as it should mean more people working and spending, which is an indicator of improvement in the economy.  On the other hand, if the number of unemployed rises, as it has done over the past few months, any real optimism regarding an economic upswing is probably premature.