Recent job cuts and losses in the public sector pushed August into the sixth consecutive month that saw a rise in those claiming jobless benefits. This comes as the three months to July saw unemployment shoot up in its fastest pace in 2 years.
Calls for government action
These numbers are adding pressure for the government to find a working strategy to boost economic growth and job creation, though government public sector cuts are contributing at least in part to the current unemployment crisis. Critics claim that while the government cuts jobs to save face on debt, thousands of workers go hungry.
The number of people employed by the public sector fell by 111,000 between April and June, with less than 10% of the newly jobless being temporary Census workers.
Chancellor Osborne hopes for the private sector to pick up the public sector’s employment gap, and continues corporate tax cuts to stimulate more growth. But recent data shows that even firms on the receiving end of the austerity drive are reluctant to hire new employees.
Official data shows that between April and June, private sector employment rose by just 41,000, not nearly enough to cover the gap left by public sector cuts.
Unemployment claimants rising
As a result of the job market, August saw a rise in unemployment claimant count of 20,300.
Though this is smaller than July’s increase of 33,7000 and is much smaller than the predicted incease of 35,000, it still contributes to the overall rising number of people seeking unemployment benefits. This rising trend started in February and is predicted to continue through September as well.
The rate of unemployed came in as predicted at 7.9%. The number of people without work rose by 80,000 in the second quarter, growing to 2.51 million unemployed.
Howard Archer, economist at HIS Global Insight commented on the jobs report. “Overall, this is a worrying jobs report, which indicates that the economy’s persistent weakness, lower business confidence and public sector job cuts are now feeding through to take a significant toll on jobs,” he said.
“This intensifies pressure on the Bank to undertake further quantitative easing to try and boost the economy,” continued Archer.