Today's labour market figures provide further evidence of a weakening economy that is deficient in demand for goods and services and hence for jobs. In August - October unemployment in Scotland was 25,000 higher than the previous quarter - a rise of 12.1% - with the Scottish unemployment rate rising to 8.5%, or in numbers to 229,000. The rate has now gone above the UK rate of 8.3%, where the numbers rose by 128,000 to 2.64 million - a rise of 5.1%. Employment in Scotland contracted by 22,000, while the rate and number inactive remained unchanged.
In the Fraser of Allander Institute we have been forecasting that jobs growth would falter and that unemployment in Scotland would begin to rise again. Sadly, this has come to pass. The main reason is that the growth in demand for goods and services is too weak to lower unemployment.
The jobs market in Scotland is, and has been, weaker than in the UK despite a brief burst of job creation into the recovery which has now ceased. The relative position for employment to the pre-recession peak and to the UK is given in this chart:
However, the raw jobs position fails to provide an accurate indicator of the state of the Scottish labour market because the supply of labour has been growing when demand for workers has been falling. This is revealed by the following chart which expresses jobs as a ratio of working population:
On this basis there has hardly been any recovery in the Scottish labour market at all.
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