October Unemployment and Exchequer Returns

This post was written by Karl Whelan

Two pieces of moderately good economic news. The Live Register declined by 6,600 on a seasonally adjusted basis in October and the standardised unemployment rate fell by a tenth of a percent to 13.6%.  Also the October exchequer returns show that tax receipts, which had been falling behind target for a while earlier this year, are now slightly above target. Overall, the non-banking component of the deficit for 2010 appears set to not be too far off the target set last December.

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40 Responses to “October Unemployment and Exchequer Returns”

  1. JohnTheOptimist Says:

    Congratulations on having a thread opened on the live register figures so quickly. It is only 30 minutes since the figures were published by the CSO. I clearly misunderstimated (as George Bush might) say your enthusiasm for bringing good news to the grateful readership of this site. I had allready posted my comments on the figures on another thread, so will simply repeat them here.

    Seasonally-adjusted number on live register down 6,600 in October.

    This comes on top of a fall of 5,400 in September. The first time since early 2007 that it has fallen two months in a row.

    This tallies with the figures in the Irish Employment Monitor, published last week by the Premier recruiting agency, for the number of job vacancies advertised in the Irish media: up 40% in September 2010 over September 2009 and the highest since 2008. It also tallies with figures published in recent months for the number of redundancies: falling sharply throughout 2010 and 30% down in September 2010 over September 2009, and with figures published in recent months for the number of PPSNs issued to foreign nationals: rising sharply throughout 2010 and 15% up in September 2010 over September 2009.

    Take into consideration September’s and October’s exchequer returns, the latter being published just yesterday. Tax revenue way above target in both those months, and well above 2009 levels, with spending below target, and the budget deficit clearly falling. There is now a very good chance that the budget deficit in 2010 will be significantly below that in 2009. At last, the Dept of Finance are admitting that the fall in spending so far in 2010 is not just a timing issue, but reflects savings resulting from lower-than-predicted inflation (as I have said about a million times on this site in recent months).

    Add in recent figures showing surging growth in manufacturing output, merchandise exports, services exports, agricultural incomes, tourist numbers etc, and it is clear that the economy strengthened in quite a major way over the summer and early autumn months. I fully expect this to be reflected in the GDP figure for Q3. Only in Ireland could such strengthening lead to a fall in consumer confidence and an increase in gloom among economists about the economic outlook.

  2. Rob S Says:

    Fell by a tenth of a percent?

  3. Brian Lucey Says:

    Not to (ok, ok, to) rain on the optimism parade but this has been greeted with “meh”… Bids on ten year bonds now a la reuters at 7.5, last trade at 7.24

  4. Karl Whelan Says:

    Ok Rob S, if you want to be picky! Now it says tenth of a percent.

  5. Bond. Eoin Bond Says:

    @ Karl/JtO

    two months in a row, first time thats happened since Q1 2007, and the 6.6k decrease is the largst monthly fall since 1996. One more month and we can officially call it a trend, right?

  6. gadge Says:

    Does anyone have the link which allows one to compare Oct 2010 revenue figures with Oct 2009? I can find the ten-month figure, but cannot find monthly figures. At JtO pointed out on another thread, the Oct 2010 may be significantly higher the figure for the same month last year.

  7. Scarab Says:

    @gadge

    There is no figure, you have to subtract the previous months cumulative figure to get monthly.

    Income Tax Oct 09 v Oct 10- 1.33bn v 1.26bn
    Corp Tax Oct 09 v Oct 10 - 226m v 434m
    Total Current Rev Oct 09 v Oct 10 - 2.39bn v 2.53bn

    @Eoin

    There has been a very smooth trend in live register figures if you ignore the CSO attempts at seasonal adjustment and compare year on year figures. Live Register is about 17k higher this month than Oct 2009, 22.5k in September and the trend continues back.

    If this trend continues (i.e. the effect of the upcoming budget on consumer spending and hiring decisions will not be greater than last year) then I would expect to see a fall in LR by between 1,000 and 3,000 in November, with another small fall/flat in December and a rise in January.

  8. Bond. Eoin Bond Says:

    @ gadge

    only way to get them i think is via the 4 end month statmend - ie end sep/0ct 09, end sep/oct 10

    Doing that….

    Oct 2009 Tax revenue = 2,390,513,000
    Oct 2009 non tax revenue = 51,794,000

    Oct 2010 Tax revenue = 2,526,119,000
    Oct 2010 non tax revenue = 1,480,772,000

    So 2010 increase in Oct tax revenue = 135.6mio = +5.67%
    2010 Increase in Oct non-tax revenue = 1,428,978,000 = +2,759%

    Total increase in Oct total revenue = 135.6+1,429 = +1564.6mio = +39.1%

  9. Joseph Ryan Says:

    JohnTheOptimist.

    Is the sky always blue from where you sit and work? Its raining right now where I am.

    Tax revenue way above target in both those months? Certainly not year to date.
    Only a boost to corp tax presumably from multinationals has managed to pull the total return above profile. Year on year VAT and Excise are down and just marginally ahead of profile.
    Where did the unemployed go? Back to jobs or back to education or emigrated?
    Did they really get work?
    Redundancy figures are a poor indicator of jobs being lost in the economy as one has to be at least two years in employment to qualify for any redundancy or to be reported in the figures.
    To me the situation has stabilised but I am suspicious of the manipulation of numbers.
    Until income tax starts improving, indicating more full time working and overtime then I remain not optimistic.

  10. Maurice O'Leary Says:

    Fall in unemployment reflects emigration which in turn decreases the long term potential of the economy.

    Income Tax receipts are a good guide to what is really happening out there. They are 4.1% below profile.

    Not even JtO can convince me that things have stabilised.

  11. Paul MacDonnell Says:

    Yes. It’s statistically insignificant and due to emigration clearly. These tax receipts. Are they net of public sector employment ‘taxes’? Presumably the €15 ‘adjustment’ will significantly reduce the tax intake as well, right?

  12. Paul MacDonnell Says:

    ‘it is clear that the economy strengthened in quite a major way over the summer and early autumn months. I fully expect this to be reflected in the GDP figure for Q3. Only in Ireland could such strengthening lead to a fall in consumer confidence and an increase in gloom among economists about the economic outlook.’

    - only in Ireland could someone survey the economic disaster all around and come up with this.

  13. Seamus Coffey Says:

    All these comparisons can be found here.

    The exact comparison you are looking for is in this table Compared to Oct 2009 tac revenue rose €135 million or 5.7%, but all of this is due to Corporation Tax receipts. Excluding Corporaton Tax revenue from the other seven tax heads is down €83 million or 3.8%.

  14. Tim Morrissey Says:

    @JTO

    You can measure mean sea level at the height of a spring tide by observing the average peaks of 10 (or 1000) waves during a 1-in-20yr storm. Subsequently you can dredge the channels and install full port facilities on that basis with corresponding depth charts.

    This has been the approach taken by many government bodies in Ireland over the last ten years.

  15. JohnTheOptimist Says:

    The live register figures aren’t the only figures relating to the labour market that are published at the start of each month. The Dept of Employment publishes figures for the number of redundancies each month. The Dept of Social Welfare publishes figures for the number of PPSNs issued each month. Premier Recruitment Agency has a thing called the Irish Employment Monitor with figures for the number of job vacancies advertised in the Irish media each month. The PPSNs for October aren’t out yet, but should be out later today or in next day or two. The other two show a clear trend. The figure for the number of redundancies in October was published this morning also and shows another big fall, down 40.4% on October 2009 and the lowest monthly figure since early 2008. The figure for the number of job vacancies in September was published a few days ago and shows another big rise, up 40.1% on September 2009 and the highest monthly figure since 2008. The full table of figures for both in 2009 and 2010 are given below.

    figures for number of redundancies each month:

    Jan 2009: 6,588 , Jan 2010: 6,574 (y-o-y change: -0.2%)
    Feb 2009: 6,212 , Feb 2010: 5,616 (y-o-y change: -9.6%)
    Mar 2009: 7,680 , Mar 2010: 5,438 (y-o-y change: -29.2%)
    Apr 2009: 7,131 , Apr 2010: 5,732 (y-o-y change: -19.6%)
    May 2009: 7,948 , May 2010: 5,006 (y-o-y change: -37.0%)
    Jun 2009: 6,764 , Jun 2010: 5,314 (y-o-y change: -21.4%)
    Jul 2009: 6,285 , Jul 2010: 5,295 (y-o-y change: -15.8%)
    Aug 2009: 5,831 , Aug 2010: 4,394 (y-o-y change: -24.6%)
    Sep 2009: 5,989 , Sep 2010: 4,218 (y-o-y change: -29.6%)
    Oct 2009: 6,561 , Oct 2010: 3,910 (y-o-y change: -40.4%)
    Nov 2009: 5,891
    Dec 2009: 4,121

    source: Department of Employment, Ireland.

    figures for number of job vacancies advertised each month:

    Jan 2009: 4,715 , Jan 2010: 5,282 (y-o-y change: +12.0%)
    Feb 2009: 4,201 , Feb 2010: 5,633 (y-o-y change: +34.1%)
    Mar 2009: 4,266 , Mar 2010: 4,896 (y-o-y change: +14.8%)
    Apr 2009: 4,532 , Apr 2010: 5,335 (y-o-y change: +17.7%)
    May 2009: 4,602 , May 2010: 6,124 (y-o-y change: +33.1%)
    Jun 2009: 4,117 , Jun 2010: 5,669 (y-o-y change: +37.7%)
    Jul 2009: 3,467 , Jul 2010: 5,283 (y-o-y change: +52.4%)
    Aug 2009: 3,626 , Aug 2010: 5,300 (y-o-y change: +46.2%)
    Sep 2009: 4,764 , Sep 2010: 6,674 (y-o-y change: +40.1%)
    Oct 2009: 4,333 , Oct 2010:
    Nov 2009: 4,432 , Nov 2010:
    Dec 2009: 4,587 , Dec 2010:

    source: Irish Employment Monitor

    So, to summarise:

    redundancies DOWN over 40% y-o-y in October
    vacancies UP over 40% y-o-y in September

    The two trends are going in opposit directions, but the right directions.

    Unless one puts in a heroic effort, it is very difficult to extract the requisite oceans of gloom from these figures that many people on here need to get through the day. But, I’m sure that some will succeed in so doing as they are well-practiced in the art.

  16. The Alchemist Says:

    Fantastic news again. The government must be busting its gut with glee that such a minute and debatable slippage in unemployment is getting headlines. When did college registrations start? October? November? Anyone chance the CSO might dig into the number of one way tickets being sold by the airlines and ferry companies?

    @jto

    Re the job vacancies. Permanent or part-time? How many are filled each month? How many re-advertised?

    Using the most naive interpretation that each month begins with a fresh supply of jobs, 2009 saw about 60,000 new jobs created. Somehow, i doubt that, and I doubt that trends are going in the opposite direction based on the stall in income tax revenue.

  17. vinny Says:

    @JTO
    Emigration figures please…………

  18. zhou_enlai Says:

    Great to see some good news. The bad news over the last while has really knocked the stuffing out of everybody. These figures suggest that there are reasons for confidence and it is not all doom and gloom (just as it wasn’t all champagne and roses during the boom). If we can keep our unity of purpose and keep things in perspective we should be able to get through this, whatever way the chips fall.

  19. Jesper Says:

    There might be some more information available:

    http://www.welfare.ie/EN/Pages/jajbfaq.aspx#q27

    There must be records of the ones who asked to have the benefits transferred to another country. The question is if that statistic would be interesting and/or available for the public.

  20. Keith Cunneen Says:

    Maybe the Famine workhouses showed substantial reductions in numbers signing on during the latter stages of the hunger.
    Speaking of myself I no longer claim unemployment and I am sitting back watching this disaster unfold one step at a time.
    This is a truly epic economic unwind - and to think it has just started !

    Stock up on beer and spuds as the continued deflation begins to cause panic among the awakening proles.

  21. JohnTheOptimist Says:

    @Keith Cunneen

    You sound the type that hid under the bed at 5 minutes to midnight on 31st December 1999. Its safe to come out now.

  22. Dearg doom Says:

    A very large component of any year on year decline in income tax is caused by the government cutting PS pay. Income tax otherwise is not down greatly, and there is some deflation around in other sectors too. Emigration may be a cause of regret, but emigrants do not claim benefits. You can say that this will reduce the long term growth of the economy, but at present it is the next couple of years that are of most interest. Many of these emigrants will return, with extra experience, when things pick up.

    The problem with the bond market is not Ireland’s ability to recover from the cyclical issues, we are on the road to do that albeit with some tough decision still needed. The problem with the bond market is that the banking bailout has rapidly raised the debt/GDP ratio and above all that they do not trust that all of the banking issues have come to surface at this point.

  23. AMcGrath Says:

    It’s an ill wind etc..
    The recession itself and it’s ancillary activities (Nama, receiverships etc.) appear to be generating some activity which will help boost Novembers figures. An example of what Morgan Kelly described as “associated parasites” . The swallows are gone but shouldn’t we celebrate the latest migration - vultures are birds too and there are plenty of rotting carcases to be disposed of.
    http://www.irishtimes.com/newspaper/breaking/2010/1103/breaking9.html

  24. Keith Cunneen Says:

    @John
    On the contary I remember having animated conversations with techie types about the nature of risk and how that mania was completly illogical and frivolous - although maybe they knew it was a scam and were just keeping stum and raking in the overtime.
    However the nature of this currency implosion and its associated artificially constructed supply chain is of such a scale and menace that now I am beginning to accept that this second fall of the Roman empire is built into the system as people seem unable to imagine a different structure so therefore the only solution is to splice and dice a smaller and smaller pie.
    Although people have the privilege to observe the entropy for a significant period until the power is switched off.
    I remember I gave a quick amateur lecture about the failure of American technology since the rise of monetarism about 3 years ago and stated that we were headed for global collapse and was greeted with smirks and polite quietness.
    This is just the start baby - limited redundancy withen the system creates a system of immense fragility.
    Such delicate maladjusted organisms do not survive long in nature , neither will this grossly maladjusted economic system.

    If I has to guess we have about 10 years to change the monetory structure before we have a epic global fail.
    I sincerely hope I am wrong - the dark ages were a bitch I gather.

  25. UpsidedownA Says:

    Re: live register figures

    these can go down when some, like myself, run out of their entitlment to the jobseeker’s benefit but don’t qualify for the means-tested jobseeker’s allowance because of their partner’s income. It’s good that the State has one fewer burden, but it hardly betokens economic growth.

  26. Pa Bandit Says:

    @ UpsidedownA

    you should continue to sign on for PRSI credits. I think it is only required quarterly or even every 6 months. This will keep you as an unemployed statistic but more importantly preserve your PRSI record for future benefits (unemployment, dental, pension etc.).

    @JTO

    Looking from afar it is hard to be optimistic given that the trickle of friends has now become dozens of friends of friends contacting me to get advice on emigrating. Perhaps that’s another job that could be advertised - Emigrant Advice Helpline? In fact, let’s get really optimistic and make it a premium call number and we’ll boost Corporation Tax and VAT to boot?

    Rational analysis of the figures is fine but “the rate of decline has slowed” spin and glee over massive emigration depressing the live register is simply delusional.

  27. Francach feargach Says:

    @Dearg Doom
    you argue “The problem with the bond market is not Ireland’s ability to recover from the cyclical issues” but rather banking etc

    The poximate cause for the recent underperformance of Irish government bonds was the substitution of the 2010 10% and 2014 3% targets with window dressing around budget cuts in the billions,. Those are seen as likely insufficient, to hit the already very generous targets. Comments then by Germany since condemn Ireland to its fate.
    The bank bailouts are more finite; the budget deficits are open ended.
    That said, the government’s policy of protecting the senior bondholders is endangering the sovereign ever more clearly with each day that passes.
    Yet Mr Lenihan again yesterday attacked those that want to see default on senior bank paper.
    Unfortunately the time has come to take stiff and painful measures to protect the sovereign.
    Easing the contingent liability on the exchequer is an ever greater imperative.
    Imposing losses on senior bond holders is just one of the less painful ways of doing just that.

  28. Pat Donnelly Says:

    Zhou and lie

    Well said!

    My fingers are crossed.

    But…….

  29. Pat Donnelly Says:

    Francach feargach
    Dearg doom
    Pa Bandit
    +1

    Keith C
    Quite possible, but hoping you are wrong….

  30. Joseph Ryan Says:

    @UpsidedownA

    I had forgotten that reason. It would be a major contributor to the fall in the unemployment register.
    Probably the biggest factor in the fall.

  31. vinny Says:

    @ JTO - any sign of the emigration figures-you have such detailed analysis of pretty well everything else they must be in your databank somewhere?

  32. noel Says:

    Another reason no doubt would be the numbers doing fas courses - these people are for all intents and purposes unemployed but do not appear on the register. This is fine once one can input this data into the equation as I gather the fas training centres (now that’s a joke is’nt it?) are pretty full.

  33. AMcGrath Says:

    @Joseph Ryan
    “I had forgotten that reason. It would be a major contributor to the fall in the unemployment register.”

    Shouldn’t that figure be relatively constant and therefore not be a such a big contributor?

  34. ObsessiveMathsFreak Says:

    People are simply leaving the country. Young people in particular.

    The one sweet crumb in the bitter pill these emigrates must swallow is that they will no longer have to pay for the incompetencies and especially the pensions of the generation that wrecked the country.

  35. JohnTheOptimist Says:

    @vinny

    Unlike live register, redundancies, job vacancies figures, which are published monthly, migration figures are only published by the CSO once a year. The last figures, for the year to April 2010, were published in September. We won’t have the official CSO figures, for the year to April 2011, until next September.

    If you were following the saga between myself and the ESRI people on this site, you will be aware of the figures for the year to April 2010. Briefly, ESRI forecast 70k net emigration in the year to April 2010, I forecast 35k. The CSO then published their figures for the year to April 2010 and estimated it (note: the CSO figure was not a forecast but an estimate) at 34.5k, of which around 20k were foreign nationals going home. ESRI then said that the CSO must have got it wrong, even though they have never got it wrong to any significant extent in the past. And, it is the CSO, not ESRI. who are the population enumerators for this country.

    As regards the trend since April 2010, as I said, we won’t have official CSO figures until next September. In the meantime, the only very slight indicator available is the monthly PPSNs figure for foreign nationals. This showed an upturn in August and September over a year ago, indicating that the level of net emigration in those months was probably less than in 2009, although I’d caution against relying too much on the PPSNs as an indicator. The PPSNs figure for October should be out any day, possibly even later today. I will post it when it is out. We’ll know then better whether or not the upturn in August and September was a blip or a trend.

  36. Joseph Ryan Says:

    A McGrath.
    re: Shouldn’t that figure be relatively constant and therefore not be a such a big contributor?

    No. The major increase in employment happened in the first half of 2009. Most jobseekers benefit last for 12 months. A lot of these people are now out of jobseekers benefit and going onto jobseekers assistance which is means tested.

    Many will not qualify for jobseekers assistance as their wives or partners are working so they will simply stop signing on and therefore are not counted in the figures or stop signing at the end of Sept having signed for 39 weeks. (It used to be important to have 39 “signings” in any one year).

    Another category in this area are those on long term short-time where JB will take up to two years to run out. In my view there are very significant numbers in this category.
    A better breakdown of the figures is required. Perhaps it is available. I would like to see it.

  37. Joseph Ryan Says:

    @OMF.

    What has happened to the concept of intergenerational dependency. What if the country of your choosing decides that in old age you are not to be supported as you were not born a citizen? or some such reason. Will you retire to the old sod to be looked after?

  38. Bredan Says:

    @JTO.

    Interesting article……..

    http://www.damninteresting.com/the-total-perspective-vortex#more-864

  39. Bond. Eoin Bond Says:

    http://finance.gov.ie/viewdoc.asp?DocID=6562

    Info doc on the 6bn for 2011, and 3-4bn for 2012. No details on how it will be split, more of a macroeconomic and fiscal background to it all.

  40. Bond. Eoin Bond Says:

    Ireland to Take 2-Year ‘Interest Holiday’ On Bank Bailout Method

    By Dara Doyle
    Nov. 4 (Bloomberg) — Ireland’s government will not pay
    interest in 2011 or 2012 on promissory notes it is issuing to
    partly recapitalize three lenders.
    The measure will help keep the general government deficit
    below the 10 percent level next year, according to a Finance
    Ministry spokesman.
    “The Irish authorities have confirmed with Eurostat that,
    as a result, no interest will be recorded on the promissory
    notes in those years, on either a cash or accrual basis,” the
    Finance Ministry said in a technical note published today.
    The interest would have been payable to the banks being
    recapitalized.

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