May Unemployment up to 13.7%

This is disappointing news. The latest Live Register-based measure of the standardised unemployment rate is up to 13.7% having stayed flat at 13.4% over the previous few months. What worries me about these figures is that the Live Register may be underestimating the true trend. The last QNHS figures, for the fourth quarter of last year, showed a jump in unemployment even though the Live Register figures for that period had been flat.

39 thoughts on “May Unemployment up to 13.7%”

  1. On that subject, the latest ESRI QEC did a pretty good measure of potential unemployment by including additional categories other than traditional “unemployed”.

    Reaches a figure of 16.5% when factoring in (among other things) part-time workers who feel underemployed.

  2. Disappointing – but I wouldn’t say unexpected. Everyone who is unemployed knows that there aren’t any jobs out there + there are more people losing their jobs every week.

    There’s only one direction that is going in.

  3. disappointing??..this is the quick ‘sign on’ of the students…nothing more…..

    ..I would say…

  4. ESRI estimated at that time that approx 20% of the “real” unemployed were not counted by existing survey (12.4 jumps to 16.5). Taking the broader ESRI measure would give c18.2% so. Net out-migration in the last 12 months must have kept this figure from breaching the 20% line.

  5. @ Consaw

    In theory, this is adjusted for seasonal patterns like students signing on. For instance, last year’s monthly increase for May was only about the same as that recorded in the months around it. But I’d agree that seasonal adjustment issues are more complex when numbers are changing fast.

  6. Consaw…yes, it could be the students out of class and ‘sign on’ factor. Below are April and May CSO figures for the past 4 years.

    Seasonally Adjusted Standardised Unemployment Rate (%) by Month
    2006M04 4.4
    2006M05 4.5
    2007M04 4.5
    2007M05 4.5
    2008M04 5.2
    2008M05 5.5
    2009M04 11.2
    2009M05 11.6
    2010M04 13.4
    2010M05 13.7

  7. I try not to read so much into the live register as an indicator (can’t recommend what else so use to get an efficient/better estimation though).

    I think a lot of the information gets lost in translation, i.e. part-time employment being counted as ”employed” even onr or two days a week, which stills entitles people to SW, change over from student to unemployed often takes month to register so you get uneven bursts or increases that don’t seem to reflect the reality, most of the time underpinning it.

    In reality these figures need top be adjusted for direct loss unemployed and long term unemployed, a separate one for student change over and part time. “Triangulation” (for reasearch and reports) could be an option between the two if needs be, but time is key also to realise seasonal factors.

  8. This months Live Register Figures are more than disappointing, they are a tragedy unfolding. Behind the headline figures we see the growth of long-term unemployment and increased reliance on means tested payments. This is demonstrated by the substantial decline in Job Seekers Benefit recipients and the continuing rapid increase in the number of recipients of Job Seekers Allowance. In absolute terms, the number of recipients of Job Seekers benefit fell from 191,185 in May 2009 to 144,985 in May 2010 while recipients of Job Seekers Allowance increased from 189,544 in May 2009 to 269,641 in May 2010. The proportion of the Live Register now accounted for by recipients of Job Seekers Allowance is 61.6%, up from 48.1% one year ago. Also, while acknowledging our high level of youth unemployment, Live Register figures for the under 25s show an increase of just 2.1% over the year to May 2010 while the corresponding figure for the over 25s is 13.5%. These figures no doubt reflect the age profile of emigrants. Given the skills and qualifications profile of the jobs that they are seeking to fill in destination countries (including tighter entry requirements for countries such as Australia), it is likely that we a loosing the very people needed to make a contribution to building the so called smarter and greener economy here. This is the double edged sword of growing long-term unemployment and the loss qualified and skilled labour cutting into recovery prospects

    It should also be noted that we are still losing jobs at a significant rate. The latest figures on actual redundancies show that over the first five months of this year a total of 28,587 people have been made redundant according to figures from the DETI see http://www.deti.ie/employment/redundancy/actualredgraph2010.XLS. That is, average monthly redundancies are running at just over 5,700. I haven’t been adding up the limited government press releases on new jobs but they are nowhere in the region of 5,000 a month, let alone 1,000 a month.

    In the light of the above, it is also slightly alarming to hear Patrick Honohan saying in his recent Bloomberg interview that “Unemployment is something that will have to be managed very carefully”. Indeed, but what does “managed” mean.

  9. There was an unadjusted increase of 5,265 in the number of people signing on the live register during May and a seasonally adjusted increase of 6,600. While the live register is not a measure of unemployment, it is still a very good gauge of what is happening in the labour market. Figures from the Department of Enterprise, Trade & Innovation show that during May, 5,032 redundancies were notified. Although this is almost 37% lower than May 2009, it is still indicative of a very difficult labour market situation. The statistical emergence from recession this year will be primarily due to the multi-national sector (mainly Chemical & Pharma), and will not result in job creation or growth in tax revenues. The reality is that the rest of the ‘real economy’ is still struggling very badly and thousands of SMEs are hanging on by a thread. Much of this is due to the lack of credit in the system. It goes to prove that you cannot divorce the banking crisis from the budgetary crisis and the labour market crisis. In a week when another €2 billion was pumped into the cesspit that is Anglo Irish Bank, it is all very depressing. Do not be fooled by government spin suggesting that the labour market is starting to improve. It is not and it is likely to be some time before it will.

  10. @ consaw:

    Benchmark estimates of the SUR for February, May (the current release), August and November of each year are calculated using seasonally adjusted data from the Quarterly National Household Survey (QNHS). The monthly trend in the seasonally adjusted Live Register is then used to estimate the monthly SUR between successive surveys. This is documented in the background notes of today’s release, here:

    http://www.cso.ie/releasespublications/documents/labour_market/current/lreg.pdf

    Also in the background notes of today’s release is the following:

    “The seasonal adjustment of the Live Register is completed using the X-11 Variant of the US Bureau of Census Method 2 (Additive Option). The seasonally adjusted series are updated twice yearly, in January and July; pending the next updating, seasonal adjustment for intervening
    months is carried out using projected seasonal factors.”

    In Eurostat calculations, “quarterly LFS data are combined with monthly registered unemployment data by using a temporal disaggregation Denton model. For the most recent months (for which the LFS data are not yet available), the monthly benchmark factors are forecasted using seasonal ARIMA regression models. The provisional estimates are calculated by multiplying these factors by the available registered unemployment figures.”

    http://epp.eurostat.ec.europa.eu/cache/ITY_SDDS/EN/lmhu_m_esms.htm

    http://www.spatial-econometrics.com/html/xcell_interface.pdf

    The official series of the CSO’s ‘Seasonally Adjusted Standarised Unemployment Rates’ now includes today’s figure, and is available here:

    http://www.cso.ie/statistics/sasunemprates.htm

    In an earlier post, Karl decribed how the CSO’s seasonally adjusted standardised unemployment rate extrapolates from the most recent QNHS data using Live Register figures on the number of people claiming benefits. The most recent QNHS is for Q4 2009 and is available here:

    http://www.cso.ie/releasespublications/documents/labour_market/current/qnhs.pdf

    You may have been thinking of the QNHS as an alternative measure; this is the official measure of unemployment. Also in the background notes of today’s release there is an emphasis that “the Live Register is not designed to measure unemployment. It includes part-time (those who
    work up to three days a week), seasonal and casual workers entitled to Jobseekers Allowance or Jobseekers Benefit.”

    Karl’s earlier post (discussing the above QNHS release) is avauilable here:

    http://www.irisheconomy.ie/index.php/2010/03/25/bad-news-from-the-qnhs/

    Karl documents how “in the case of 2009:Q4, the extrapolation was not accurate.” He also stated that “Overall, the picture has changed somewhat from one in which the unemployment rate appeared to be flattening to one where it still seems to be rising.” And this has turned out to be the case.

    Also, Constantin Gurdgiev, in one of his earlier posts from the start of April, said that “contrary to all the talk about ‘bottoming out’, the latest fall-off in unemployment recorded in Q4 2009 is seasonally consistent with normal patterns, implying that in all likelihood, unemployment figures will remain on the rise from Q1 2010 on.”

    http://trueeconomics.blogspot.com/2010/04/economics-6042010-qnhs-figures-of.html

    This graph from Constantin’s post is very illustrative:

    http://4.bp.blogspot.com/_2TONRBOd21o/S7uDCexh-iI/AAAAAAAACKU/CBfgiG7O7VU/s1600/3.png

  11. Is this the recovery of the second half of the year we were all promised?

    The economy is dying. What’s worse we think that the medicine being administered is poison.
    The only retort we get from the Government is that the IMF and bond-market rags think that they’re doing a great job and should keep going.
    We need to define parameters to measure recovery, we need to set a date when we expect them to be turned around.
    We need to go to them with our proposal – if the economy continues to die we want a new doctor or at least new medicine.

  12. Ok let me put it another way – either we say to our govt that deflationary austerity is not working or the bond markets will.
    Only difference is timing, but timing can be the difference between moribund and dead!

  13. @ Eureka

    Let me pose the question, what is the alternative to the current policy?

  14. I’m a little disappointed. I had been expecting a small improvement. I know that we are still losing jobs, but some are being created too, and anecdotally, I felt that quite a few jobs had been created since Christmas.

    However, unemployment is not getting the attention it deserves IMHO. The obsession with fixing the banks and the public finances have dominated the political agenda, but in truth, the real problem with the banks and with the exchequer is unemployment. If we can fix the unemployment problem, then our budget, and our banks will recover rapidly. Abolishing agencies and fighting waste would have been an excellent priority a few years back, but we have bigger fish to fry right now.

    Even without spending money on a stimulus, there are loads of reforms we could implement to increase productivity and employment. Many are cost-free.

    I actually wrote to the Taoiseach this weekend about refocusing policy on economic reform rather than solely fiscal retrenchment. I’m not holding my breath though. But this must become the focus of discussion if we are to begin to recover. No economy in the history of the world has ever been beyond improvement, and if we start to seek ways to improve ours, we will soon find them. This is the real key to our national recovery.

    I’m sure other people have dozens of good ideas to add to the pot. If you do, can I suggest you write in to the Taoiseach with them. If his interest could be piqued by some economic reforms, instead of grim budget cutting, that would be a very productive use of his time.

  15. Jim Power is right.

    The OECD (and other) projections for 2010 and 2011 imply a further sharp contraction in GNP. While the export sector will recover this will provide little or nothing in the way of jobs or taxes (indeed some of it is barely economic activity at all).

    On the nominal GNP measure, Ireland will have a experienced a cumulative decline of over 20% by year-end, and barely a 1% rise in 2011 (as per OECD).

    That’s a Depression. So there should be no surprise if even poor measures like the Live Register show a continued rise in unemployment. Shocking, but not surprising.

    The mantra ‘we have no money’ is not true as Anglo proves. Better, surely, to invest it in something that might actually provide a return in terms of jobs and taxes.

  16. @ TullMcA: “Let me pose the question, what is the alternative to the current policy.”

    Ensure that the tax euros paid by citizens are NOT given to private companies which are legally insolvent and should be liquidated. We have many more deserving human beings amongst our citizens than non-deserving banksters. Look at the vast difference between the relative petty amounts needed to keep municipal baths open, versus the obscene amounts being given to ‘the commercial sponsors’.

    Anyway Tull, its the political, economic and financial mindsets that are the problem. Unless or until these change, its business-as-usual. I’m not optimistic.

    B Peter

  17. @ BP

    leaving aside the Anglo debacle which is going to cost us 25-35billion there is still a yawning deficit of 20billion or so at an annualised rate. This will be there each and every year. Moreover, without the tax and spending adjustments of the last two years, this would be 35billion or so. Apart from emoting about the issue, what do you propse we do about the day to day spending gap of 20billion.

    @eureka,
    I asked the question first. If we are spending in excess of income what is the solution. It seems to me we have two choices, tax middle income wage earners even more or cut spending.

  18. @Tull
    fair enough.
    You have three choices:
    cut what’s going out
    grow what’s coming in
    or do a bit of both.

    The long term potential of growing what’s coming in is determinded by the cuts on spending – both their magnitude and their target. That’s why every penny counts – the 20€ billion to Anglo is not affordable.

    I heard today of forced redundancies in the University sector, for example. The multiplier negative effect of such a cut is huge. Much better keep a few quid from Anglo and invest there.

    It’s not a broad strokes solution we need. It’s targeting cuts and then accepting that you can only cut so much before you kill the economy.

    Here’s a start – stop pumping money into Anglo and actually invest that money in a capital scheme for real companies.

  19. @ eureka,

    I agree with you on Anglo. Alas, due to Mr Cowen’s allegedly inspired decision to extend the guarntee to Anglo we seem to be destined to wear the 20billion plus loss unless we can come up with an alternative plan to stuff the bondholders. This cannot happen while the current guarantee is in place. One fervently hopes our new masters save us from our folly. Even then if we could stiff the bondholders ot would only save us about 5billion. To save the full 20billion we would have to stiff the ECB.

    I also agree with the genral implication of you other solution. Cutting capex and expenditure on the sharp end of education is nuts. Far better to go Quango hunting and the layers of bureaucracy in the HSE. However, our leaders appear to have given the farm away with the Croker deal.

    @ Greg,

    Is a 20billion expenditure gap not Keynesian enough for you?

  20. @ Tull, eureka

    At our levels of indebtedness a keynesian approach is frankly not available to us. The money being borrowed for the banking rescue could not be borrowed for ordinary fiscal spending so that’s a bit of a moot point. (The NPR is of course a different matter)

    Any idea how strong the multiplier effect is in Ireland. Given how reliant we are on international trade, I would imagine that any fiscal stimulus may not have achieved that much anyway.

    I jokingly said it at the beginning of the crisis, I commented on this site about it a couple of months ago, and i will repeat it, the ECB needs to monetize part of the debts of the periphery economies (or some other approach to debt forgiveness). Frankly, moral hazard be damned. Would you condemn a drowning man because he ignored a no swimming sign?

  21. GK

    ” The money being borrowed for the banking rescue could not be borrowed for ordinary fiscal spending so that’s a bit of a moot point.”

    Not true.

    Bond investment is dependent on the continuity of cash flows. The degree of uncertainty over that continuity determines the compensatory yield. Since 2008 borrowing has been focused on banking rescue, while fiscal spending has been cut. Yet Irish 10yr bond yields are now the second-highest in the Euro Area, leading the pack behind Greece.

    The cashflow from zombie banks- at zero- is somewhat less than the cahlow from investment and employment creation, where tax revenues might reasonably be expected.

  22. I spoke with an acquaintance this evening. FF voter, SME sector, mainstream views. He described his recent experiences with one of our ‘national’ banking institutions.

    Three ‘relationship managers’ since Xmas, but no banking relationship any more. Long and unexplained delays in the normally routine conversion an interest-only loan to a term loan. He heard on the golf course that the lending staff seem to be gone into NAMA stuff, whille lending is now ‘staffed’ by branch staff. He wasn’t sure if it’s a deliberate strategy to ‘accidentally’ disrupt the credit application process, or just a reflection of management chaos.

    Yes we have no bananas. Luckily his business is solvent, and he is not depending heavily on the credit facility.

    @ Tom Ronayne and Jim Power: Reality check. Always good.

    @ GK and George: Yes. Without peripheral debt forgiveness there can be no global recovery. Trade Development and Foreign Debt Michael Hudson (1992) Pluto Press

    @ tull
    Yes, but no austerity without accountability. Public sector reform has to start with a change of government. That’s not a panacea, but it is an honourable and honest acknowledgement of the crisis, and the suffering.

  23. @Tull
    Minimising the billions being wasted on private institutions by comparing them with the public deficit is deeply disingenuous. There is not an extra 20 Billion in cuts/taxes that have to be made on top of the ones already laid out by the government. We ALREADY HAVE a deficit reduction program which will close the gap over several years. At worst it may be brought forward. Every one of the 24 Billions put into Anglo though is an unnecessary cost of the government’s catastrophic banking policy and the disaster, not debacle, that is Anglo. If Anglo is a debacle what does that make the Glass Bottle site? A hiccup? Furthermore, if 20 Billion was cut/taxed in the morning yes our borrowing would fall but the economy would go into a megadepression. But if we had repealed the guarantee for Anglo the economy would BENEFIT from the 24 Billion not being borrowed as it is being pointlessly burnt on the Stephen’s Green pyre.

  24. http://news.bbc.co.uk/2/hi/england/10222188.stm

    An example of “going postal” near Sellafield aka Windscale. Time of stress.

    Yes, unemployment is increasing and we all expect “growth” of this kind to continue. The economy is contracting, as a reaction to theremoval of the false lift from bubbles of debt and due to the measures that were wisely taken by our wise government. This contraction will continue for some time., probably years, as the deficit is trimmed, removing the stimulus of “excessive” spending by the government. This will continue to worsen. Do not forget the additional interest payments at way above the ECB cash rate, these will impact more and more.

    Yes, it was the best of times and Bertie will run for President.

    A truly smart economy would start to create employment, based on agricultural production. Do we all know that the world price for sugar has never been higher? Have we a sugar factory? Empty fields, withdrawn from production due to farmers dole? Suggest anything? Cutting imported inputs to farming may enable more employment also. Competitiveness is increasing with every bit of bad news!

    How is Japan doing now? Taking on government debt and slowly allowing land values to decline seems to be a three or four decade policy? Bet they would have preferred to have let their banks go, twenty years ago? Ireland is three years in and counting. Cut our losses?

    The one hope I see, is that after a decade or so, all or many governments will renounce their debt. It will wipe out the banks, but good banks with no debt can be started at any time, if we prefer to repeat our mistakes. But it will change the faces of those employed by TPTB along with a few of TPTB. We will not really notice the changes.

    How about a cheap effective ant-corruption commission? That should recover some of the proceeds of crime and rid us of familiar faces? Not all the guilty, but one or two is a start!

  25. According to a report by the Kauffman Foundation; In the US it’s the unemployed gray-heads who are taking the reins of the new startup economy.
    Most of the growth in startups was propelled by 35- to 44-year-olds, followed by people 55 to 64.

    Self-employment among those 55 to 64 rose to nearly two million, 5 percent higher than in 2008. Among people over 65, the ranks of the self-employed increased 29%.
    Many older people who had expected to retire discovered their pensions had shrunk and their homes were wort a lot less than they thought. So they decided to get out there and sell themselves (I knew my time would come, if I just hung in there and kept swinging).
    .
    http://www.nytimes.com/2010/06/02/opinion/02reich.html?partner=rss&emc=rss

  26. @ TRP
    I mean reforms that are not financial in nature. Legal innovations, more modern methods of doing things and above all supporting the proper functioning of markets.

    The kind of things I’m talking about are liberalising the bus market, working to end the cap on barristers in training, exploring the possibility of a clearing house for the conveyancing of property (reducing insurance costs).

    In other words, attacking the legal and systemic constraints on the economy, while we are unable to do very much financially. I think for most people, boosting employment = fiscal stimulus, but that is not true.

  27. Eureka
    There is more to this than unemployment rates! I will leave that to you to show differences and similarities. TPTB in Japan decided to maintain their banks balance sheets. All bubble values have declined and employment has been maintained by massive stimulus from the gov. 200% GNP debt.

    Do we wnat that? Obviously not and we have decided on unemployment as a means of enforcing “competitiveness” on labour in Ireland. How is that working? We featherbed capital though and try to maintain land costs. Why?

  28. George Orwell

    The New Deal ended in WW2 …….No one knew that a Japanese fleet was approaching Pearl? Ha!

    This is time for government to squeeze the little guys. No lollipops! Decades of reform alright! Somehow, the absence of banks and banking as we love it, shovelling cash into feckless hands, will be the least of the things we miss!

    Federal Europe. About time. The British fought to stop it and still do, being on the inside “to a degree” to find out what they can for TPTB in England. What we are told to read in our “newspapers” is different from the truth, but the more you have lived through, the greater your chance of understanding this. Britain lost the WW2. The USA won. Japan and Germany survivors eventually gained. China went over to Mao. But look at them now? Russia lost, keeping Bolshevism for far too long. Not what we are taught!

  29. There are two indicators here that are worrying about JSA being a higher proportion that JSB.

    There are only 3 circumstances in which people would have to move from full time employment to JSA
    1. If they have not lived and worked here long enough to qualify for JSB
    2. If they have only been in the workplace a short time – or not at all
    3. If the were previously self employed but the business failed
    So add to this people coming off JSB after 1 year of unemployment.

    No 3 is the most worrying as the only real option for some might be self employment – if this is not working then the economy really is in serious trouble.

    Add to this the dilution of the figures due to emigration of both Irish and migrant unemployed, and take into account the fact that there might be some overstatement due to people transferring onto other “schemes” things look bleak.

    I find it laughable that Cowen cannot do simple Math. The reason the net reported redundancy figure is reducing is because there are fewer jobs to lose. The headline net number should slowly decline as the overall number of jobs available reduces – unless of course things get worse.

    One issue I think might become interesting in 6 or 12 months time is what happens when people on shorter term courses finish up.

Comments are closed.