Friday, January 8, 2010

Economics 08/01/2010: Live Register

Here we go, folks – as predicted, right on the minute. Live Register is up again to new historic highs. Seasonally adjusted number of new unemployment claimants rose 3,300 in December, just as the country was ‘enjoying’ what the media and the politicians were heralding as a ‘buoyant’ Christmas sales season. Now, recall the ‘moderation’ and ‘improvements’ (per our Government claims) in the past, namely – October 2009, when the Live Register declined 3,000 for the first time since March 2007. December increase has more than offset that, and it comes on 900 new claimants added back in November.

New Live Register record is now at 426,700 – 1,200 above September 2009 previous record of 425,500. Unemployment is now at 12.5% (up from 12.4% a month ago), with lower participation rate and emigration – two factors driving people out of the labour force and thus out of unemployment count (as if those who have no jobs and are not looking for one are any better off than those who are officially unemployed) are the only thing that keeps the unemployment rate hitting 13% now. The estimated unemployment rate has thus risen from 8.5% a year ago to 12.5% today – a 4 percentage points rise in 12 months.

The trend suggests that we are likely to reach 13.3-13.7% unemployment this year, with the median probability forecast of 13.5%.

The monthly increase in the seasonally adjusted series consisted of an increase of 2,900 males and 500 females – suggesting that the latest jobs losses are not coming out of retail and services sectors. 800 additions came from under 25 year olds, suggesting once again that the core employment sectors and age categories are being hit this time around – just as in the latest QNHS results for Q3 2009 which showed that industrial / manufacturing jobs are now leading other sectors in terms of jobs losses. 2,700 seasonally adjusted jobs losses were in over 25-years of age categories.

One added point. We tend to look at the seasonally adjusted series, which tell us more about comparative dynamics of the time series. But in level terms, seasonally unadjusted Live Register now stands at 423,595, up a massive 10,090 in one month or 133,577 in 12 months since the end of December 2008 (+46.1%). This compares with an increase of 119,642 (+70.2%) in 2008. Of course, 46.1% sounds like a better deal than 70.2% - which in parlance of our stockbrokers, banks and Government analysts usually means a ‘moderation in the rate of increase’ or ‘bottoming out’ of the trend. Alas, the numbers are much more grave than the percentage change terms imply. In absolute terms, measured in average weekly increases recorded in the month, December was the seventh worst month in 2009 (+2,523 average weekly increase).

Finally, the CSO release also provides an insight as to just how tricky computations of unemployment are. CSO highlights two programmes whereby taxpayers pay unemployed individuals to either continue their work or to engage in other activities. These individuals, still in receipt of state aid are then removed from the unemployment roster. The two programmes that yield this type of treatment are Short-Term Enterprise Allowance scheme (since May 2009 paying workers out of the JB system to engage in self-employment) and work Placement Programme (since August 2009 engaging workers in 6-months long from the social welfare rosters to undertake unspecified ‘employment’). CSO states the numbers of such ‘employed’ individuals who are not otherwise accounted for on the Live Register to be at 3,785 at the end of September 2009, the latest date for which the figures are available. Given that this number increased by roughly 2,500 since October 2008, it is safe to assume that average monthly additions to the programmes stand at around 200. This, in turn implies that some 4,600 people are currently ‘employed’ with the use of these state funds that are not included in the Live Register, bringing the real number of claimants in Ireland to over 430,000 in seasonally adjusted terms.


patrick1978 said...

With Irish unemployment at 12.5% and set to rise,
read here Constantin where a stockbroker predicts AIB and BOI to reach 3 euro.

Constantin, I dont know about you but I get the feeling that stockbrokers are living in a parallel universe.

Unknown said...

See this link for a dynamic map of Ireland showing how unemployment has changed over the past 5 years.