LONDON (Reuters) - The number of people claiming jobless benefit jumped by the biggest amount since 1971 last month and the wider measure of unemployment rose above 2 million for the first time since 1997 in the three months to January.
The Office for National Statistics figures on Wednesday also showed average earnings including bonuses in the three months to January grew at the weakest annual rate since records began in 1991. The single month annual rate actually fell — the first fall on record.
“The unemployment data are truly awful, heightening fears about the potential depth and length of the recession.
“Unemployment smashed through the 2 million barrier with ease on the International Labour Organisation measure and it seems set to head up towards 3 million pretty rapidly over the coming months as the economy contracts sharply and struggling businesses look to contain their costs.
“Earnings growth seems likely to fall back significantly in 2009 given that unemployment is soaring, inflation is retreating sharply, inflation expectations have plunged and companies are desperate to keep down their costs.”
“A big part of the job losses are going to start coming through over the course of 2009. A lot of the economic data, on the manufacturing side particularly, has been very weak and we are seeing that in the fall in net trade and global trade and hitting manufacturing employment.
“We are expecting headline ILO unemployment to be touching three million by early next year. So we think the next six to nine months are going to see more of the same.”
“It’s clear that the data is absolutely dreadful. The claimant count, which has been somewhat on the downside in recent months, has absolutely caught up and the 138,000 was well above consensus expectations. Going forward we expect unemployment to rise well in excess of three million through next year.”
“The unemployment figures show an alarming level of slack in the economy. The figure is well on track to reach 3 million. The cost of this crisis for the taxpayer is rising.”
“Horrendous. It does take around about six months before changes in GDP have their maximum effect in the jobs market.
“What we are seeing now in February is really a reaction to the substantially weaker growth numbers that we were beginning to see in the autumn last year.
“This is probably going to persist for a while as long as that kind of growth continues. But six months down the line you are going to see some bad numbers.”
“Today’s UK labour market data is truly awful.”
“Big increases in unit wage costs — particularly for the manufacturing sector — add to upside risks for unemployment in the months ahead and we continue to look for the ILO unemployed level to breach the 3 million mark at some point next year.
“We doubt that real consumer spending growth will return to positive territory until 2011 with the UK economy as a whole recording negative growth for both this year and next. Consequently, we could yet see the need for the BoE’s quantitative easing efforts to be stepped up even further.”
KENNETH BROUX, ECONOMIST, LLOYDS GROUP “A shocker claimant count at +138k. Sell GBP, buy gilts.”
“The upward revision to the January claimant count means we’ve moved up the range for monthly job losses in 2009 to 100k+ from 80k at end 2008.”
“Manufacturing jobs continue to disappear at a frightening rate. It’s an illusion to believe that a lower GBP will support exports. What you need in the first place is foreign demand and that isn’t there right now.”
“The figures are pretty grim, but it is perfectly reasonable to see numbers like this. On the earnings, bonuses are pretty much non-existent.”
“These are tough times, these are very bleak figures, and I don’t resile from that at all. January and February were always going to be difficult periods immediately post-Christmas but we keep going on and we keep perserving and trying to give people all the help we can.”
- Weakest 3mth y/y average earnings rate including bonuses since comparable records began in 1991
- Weakest single mth y/y average earnings rate including bonuses and first fall since comparable records began in 1991
- Biggest rise in claimant count since comparable records began in 1971
- Highest claimant count rate since March 1999
- Highest ILO unemployment level since 1997
- Highest ILO unemployment rate since 1997
- Biggest 3mth y/y rise in manufacturing unit wage costs since comparable records began in 1985
- Biggest 3mth y/y fall in manufacturing productivity since comparable records began in 1985