Re: "The Media" seeking the most negative angle on every story relating to the econom
A dose of relative reality recieved yesterday, courtesy of Ulster Bank Markets & Simon Barry, their chief economist:
"Another better-than-expected Live Register reading as the monthly increase of just 600 is the lowest in 17 months…
The monthly Live Register (LR) numbers have consistently been better than expected in recent months. The latest numbers for September represent a continuation of that pattern. The monthly rise in the total signing on this month (on a seasonally adjusted basis) was a mere 600 – the lowest increase since the 500 rise recorded in April ’08.
As the graph below clearly illustrates, there has been a striking improvement in the trends on the LR over the course of this year. From the worst month on record in January (31,400), there has been a steady improvement in every month since then, with the average rise in the third quarter of 5,500 representing the best quarter since Q4 07.
The breakdown of the numbers reveals that the number of males signing on actually fell in September. The decline of 400 recorded this month was the first fall in over two and a half years. There was an increase in the number of females added this month, but the rise of 1,000 was the lowest monthly rise since April last year. While the LR data don’t provide any insights into how labour market conditions across different sectors of the economy are evolving, these numbers hint at a stabilisation of employment in the male-dominated construction sector.
Improvement also evident on the unemployment rate, which didn’t rise this month – the first time that has happened since December ‘07
The monthly LR release also contains an estimate of the unemployment rate, and there were further grounds for encouragement on this front too. The estimated jobless rate was 12.6% in September, which following an upward revision in the August data, means that September was the first month since December 07 that didn’t see an increase. Again, the trend improvement here is notable. Back in the early months of the year, the jobless rate was rising at an average pace of 0.8 percentage points per month.
This has important forward-looking implications in terms of where unemployment is likely to peak. The much better trends of late now offer important evidence that the peak in the unemployment rate will likely be considerably lower than feared and will be reached earlier than previously anticipated. Forecasts of a peak of 16.5% or more now, thankfully, look way too pessimistic. In terms of our own view, we had been anticipating a peak of a little over 15% next year. Based on the latest trends, something at or perhaps below 14% now looks to be on the cards.
The total on the LR is now set to average close to 400,000 this year, way lower than the 440,000 assumed in the April budget, providing much-needed relief to the public finances
From a policy perspective, these developments are certainly very welcome indeed. The April Budget anticipated an average level of unemployment this year and next of 12.6% and 15.5% respectively. This year now looks likely to come in below 12%, for example, as the numbers on the Live Register are set to significantly undershoot the 440,000 average level assumed in the April budget. We are presently on course to averaging around 400,000. 40,000 fewer workers on the LR would result in annual savings of between €400million and €800 million to the Exchequer position, so this will provide much needed relief to the Government finances.
Following signs of stabilisation in the last week’s Quarterly National Accounts and Quarterly National Household Survey, the latest LR data offer further encouragement that the Irish economy is in the process of bottoming out. The pace of deterioration in labour market conditions has eased dramatically relative to what was happening at the beginning of the year. The peak in the unemployment rate now looks set to occur earlier, and at a lower level than previously expected. Though today’s numbers don’t provide direct evidence, rising emigration is now likely playing an increasingly prominent role in the process of adjustment in the Irish labour market."
This all sounds encouraging to me.