Has Unemploment Peaked?
With the recently announced blockbuster profits released by JP Morgan, many are heralding the news as a full recovery of the banking sector. Those same people are also hailing yesterdays news on unemployment figures as a new dawn in the UK’s employment market, but not everyone is so sure …
There is no arguing with the fact that, due to the far greater flexibility of the labour force, unemployment levels during this recession has not come close to reaching levels of previous hard times. Keeping that in mind, however, yesterdays figures show that unemployment is STILL rising and is likely to continue to do so for quite some time. Indeed, with many small and medium enterprises (SME’s) still struggling to get any form of credit from banks and lenders, it would not be surprising to see a substantial increase in job losses prior to the Christmas period.
Also, with job vacancies at their lowest level since records began, those who recently left school, college or university are also going to struggle to find employment which will, of course reduces the revenue available in the market for everyone.
While there will be arguments against this as figures show that unemployment for 16-24 year olds has held under the 1,000,000 figure, it isn’t taking into account the vast amount of students who go travelling and have gap years, thus distorting the facts further.
The unemployment figures were released alongside earnings data, although the latter received far less fanfare, and is also giving us reason for concern. With the growth of average earnings continuing to slow down there is great fear amongst retailers particularly that this will be a very lean Christmas as far as retail sales go, particularly when you combine this with the return to 17.5% VAT and the non-moving inflation rate. this is clearly evident with the introduction of large retailers sales at the beginning of October to try increase consumer spending. Again, there will be a decrease in consumer purchasing as people spend less due to decreased disposable income, with shops and stores reduced revenue, companies will have to contract to the market forces thus reducing staff levels accordingly, increasing the already high unemployment market even further.
Russell Jameson, Collections Manager of Federal Management, one of the UK’s leading commercial debt collection agencies said “While there has been an increase in people trying to clear their debts, the Christmas period is a notoriously hard time for everyone when it comes to dealing with bills and overdue accounts, with many people putting off making payments for their bills in order to spend lavishly. We would advise anyone who has outstanding debts to ensure regular payments are made and not to spend beyond their means over the holiday period, thus incurring further debt.”
Indeed, all over the world countries are trying to advise people on not over-spending this Christmas based on new statistics released from credit agencies that show consumer bad debt was on the rise and are warning against lavish spending over the Christmas period to help prevent further increases of bad debt and and lengthier periods of hard times for consumers.