Stephen Boyd: Caution needed when reading job figures

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ACCORDING to the latest official data, the performance of Scotland’s labour market relative to the rest of the UK was quite spectacular over the first three months of 2013: unemployment and inactivity fell and employment grew by a record 54,000.

Contrary to recent trends, women benefited disproportionately and there was a small but welcome fall in the youth claimant count.

However, it pays to be cautious when responding to labour market data and there are good reasons why no-one should get carried away.

First, the Office for National Statistics (ONS) practice of publishing headline labour market data on a rolling three-month basis means there’s significant double-counting across the monthly releases. A “record increase” in employment of 39,000 (December–February) was also recorded in April. This month’s “record increase” was 59,000 (January-March). Yet total employment stands only 10,000 higher.

Similarly, while it is accurate to state that each of the last six ONS releases have reported falls in Scottish unemployment, it’s wrong to conclude it has been falling in a linear fashion for six months. Unemployment now stands at 199,000, an increase on the figure reported last month and only a small decrease of 5,000 on December 2012. Unemployment is basically stagnating at a high level.

Second, relative performance is much less impressive over the past year: Scotland outperformed the UK on unemployment but underperformed on employment and inactivity although London’s strong performance skews UK figures. Third, this ONS release revealed nothing about the new jobs created – many will be part-time and/or self-employed – or the trend in wages. UK data confirm real wages plummeted over the past year and there’s no reason to believe Scotland was sheltered.

Finally, there is a long way to travel before pre-recession levels of employment and unemployment are attained. With the bulk of cuts to come and high unemployment and falling real wages constraining consumption, the STUC is sceptical the first quarter’s performance can be sustained through 2013.

• Stephen Boyd is assistant secretary of the STUC.