The latest unemployment figures are a welcome boost for the Government. Despite strong economic growth, the live register has climbed steadily for much of the past year. But last month the seasonally adjusted total fell by 2,900; a sizeable decline. A Government spokesman quickly cited this as evidence that economic growth was creating new jobs and cutting unemployment. The monthly live register figures are notoriously difficult to interpret. This was highlighted last year when the annual labour force survey showed unemployment standing 80,000 below the live register figure. This discrepancy and the much sharper downward trend shown in the labour force figures have yet to be satisfactorily explained. As the Progressive Democrats leader, Ms Mary Harney, pointed out in a comment on the latest figures, policy makers still have no reliable measure of the unemployment trend.
As it is a measure of the number of people claiming unemployment payments, the live register can be affected not only by a genuine decline in the numbers out of work, but also by other factors such as administrative changes. A decline is still welcome; after all it means fewer people are having to rely on unemployment payments. But it would be unwise to read too much into one month's figures. For months now the unemployment figures have been the only main economic indicator not reflecting strong economic growth. Figures for exports, industrial production, borrowing from banks and building societies and tax revenues all indicate strong economic performance. Sectoral employment figures suggest the number of people at work is rising strongly.
It is still not clear why this growth has not led to a sharper fall in the live register. The large numbers of young people entering the jobs market annually continues to be a factor, and job opportunities appear to be attracting people who had left the workforce back into the market. Changes in the way people sign on for the live register have also affected the figures. If the March figures are the start of a renewed downward trend, it will indeed by welcome, but the Government would be unwise to take this for granted.
There are a number of policy issues for the Government to tackle in this area. One is to develop a more accurate and regular measure of the jobs market than the monthly live register. A survey of the labour force taken more regularly than the current annual count may be the answer. The Government must also bring forward more policy measures from its recent study of unemployment. Some were included in the Budget, but a sustained attack on the problem is required. The Cabinet needs to propel the issue back to the top of its agenda. Finally, the Government and the social partners must make job creation the priority in the forthcoming talks on a new national programme. The National Economic and Social Council is currently working on a blueprint for the new programme. It now has an opportunity in its report to advance fresh ideas.