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News : Irish Last Updated: Apr 24, 2009 - 5:31:05 PM


Irish Live Register surges by 33,000 to 326,100 in January; Largest annual rise since at least 1967; Number of unemployment claimants will reach over 545,000 by end of 2009
By Finfacts Team
Feb 4, 2009 - 11:11:50 AM

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Source: CSO

Irish Live Register: The seasonally adjusted Live Register total increased from 293,100 in December to 326,100 in January, an increase of 33,000, according to the CSO. Ulster Bank says the number of unemployment claimants will reach over 545,000 by the end of 2009

The monthly increase would be the equivalent of 2.5 million job losses in the US - - a level that would create a national outcry.

In the year to January 2009, there was an unadjusted increase of 146,412 (+80.7%). This is the largest annual rise on record from the CSO since the series began in 1967.

This compares with an unadjusted increase of 120,987 (+71.0%) in the year to December 2008.

Unemployment assistance was introduced in 1934 and by the late 1930s, 78,000 people were receiving this benefit.

Other features include:

The monthly increase in the seasonally adjusted series consisted of an increase of 22,900 males and an increase of 10,100 females.

The standardised unemployment rate in January was 9.2%. This compares with 6.3% in the third quarter of 2008, the latest seasonally adjusted unemployment rate from the Quarterly National Household Survey.

In the month, the estimated number of casual and part-time workers on the Live Register was 22,807 males and 22,619 females.

The Live Register is not designed to measure unemployment.

It includes part-time workers (those who work up to three days a week), seasonal and casual workers entitled to Jobseekers Benefit or Allowance. Unemployment is measured by the Quarterly National Household Survey and the latest seasonally adjusted figure, for June to August 2008, is 143,500 persons unemployed.

Lynsey Clemenger, economist at Ulster Bank commented:

Live Register figures put further pressure on Government finances…

The latest Live Register figures place further pressure on the already strained public finances, in the wake of Exchequer figures which showed total tax receipts down almost 20% in January. The numbers claiming unemployment benefit rose by 33,000, or 11.2%, from December, by far the largest monthly rise on record (+ 9.8% in March 1968).  Last month we signalled that it was unlikely we had passed in the peak in monthly additions to the Live Register, and while this was certainly realised in January, the month may represent a spike as a result of a particularly pronounced shakeout in employment after the Christmas holidays.

The total on the Live Register now stands at 326,100, up 82% from year earlier - yet another record rise. If the average monthly rise for the year falls back somewhat from the January increase, to say 20,000 (taking account of outward migration), the number of unemployment claimants will reach just over 545,000 by the end of the year. This gives an annual average of 435,000, compared with the Government’s forecast of 340,000 at the start of January.

Construction-related job losses continue to dominate…

Males made up 22,900 or almost 70% of the total monthly increase in claimants in January - a clear indication that construction-related lay-offs are continuing at a fast pace. Females are not escaping the effects of the deteriorating jobs market either, with the number of  claimants rising by 10,100, or 10.3%, the largest monthly rise on record, and up 62% on a year earlier.

As we have hi-lighted for some time now, we expect that job losses in construction and related industries will be ongoing in coming months, however, we also expect a more pronounced decrease in employment in the services sector, particularly so in Wholesale and Retail, and Financial and Business Services, as the year progresses.

Unemployment rate to hit double-digits in coming months…

The standardised unemployment rate increased further, rising from 8.3% in December to 9.2% in January, the highest rate since December 1997. This is up from a low of 3.7% in February 2001, but remains below the average unemployment rate of 16% in the eighties.

Given that we expect the weakness in the labour force will accelerate in coming months, double-digit rates of unemployment will likely come sooner than we previously thought, and we now see the rate hitting 10% in coming months. This estimate takes into account a downward revision to the Live Register estimate of unemployment when the official unemployment figures are released in the Q4 Quarterly National Household Survey, as this measure does not include part-time workers who are eligible for unemployment benefits.

Davy Chief Economist Rossa White says: Record spike in unemployment claimants highlights pace of deterioration in economy:

Claimants jump 11.3% month-on-month, double the worst seen so far

  • The Live Register rounds up a miserable triumvirate of first economic data points from 2009. Claimants surged 11.3%, eclipsing the previous worst months: +9.8% in March 1968 and +8.6% in January 1975.

  • This latest release follows news that new car sales fell by 67% and tax revenue by 19% in January compared with the same month a year ago.

  • It must be noted that the 33,000 increase is double the worst seen so far, i.e. the 16,400 spikes in both November and December.

Unemployment rate estimated at 9.2%, but this may exaggerate it for now

  • Note that the Live Register is not the official measure of unemployment, e.g. it includes part-time workers. We reckon that there has been a spike in part-time workers who can claim benefit but are not officially unemployed. The latest official labour market figures (albeit out-of-date) are due in three weeks.

  • The estimated unemployment rate of 9.2% is up from 5% a year ago. We reckon the rate will reach at least 13% by the end of 2010.

  • Note that males accounted for two-thirds of the monthly increase. This reflects the fact that construction remains the weakest sector and that the public sector has the highest share of females.

Rise in number of claimants adds to government expenditure

  • Social transfers will rise by at least €350m based on the last month alone. Of course, the government will get some of this back through taxes as that money is spent.

 

Job losses require urgent response from government - IBEC
 
Commenting on the latest CSO Live Register figures, IBEC Chief Economist David Croughan said: "There is clear evidence that the number of job losses is accelerating sharply. The number of unemployed increased on a seasonally adjusted basis by 33,000 in the month of January, and the number unemployed reached 327,900. This was an increase of almost 147,000 over January 2008, and came on top of notified redundancy figures, released earlier in the week, recording a jump in January to 6,700 from a fourth quarter monthly average of 4,411."
 

 Croughan said that businesses are suffering badly from a global recession, a financial crisis that has led to more restricted and expensive credit, and the sharp devaluation of sterling that is making exporting to the UK almost impossible.
 
 IBEC called on Government to divert funds committed to the National Development Plan towards supports to business to improve their competitiveness. Otherwise, job losses on a massive scale will ensue.
 

 "Alleviation measures are needed to help businesses suffering from adverse currency movements and help in their medium term restructuring, through higher grant assistance. Other measures needed include a temporary suspension of employers’ PRSI, a reduction in energy costs, help in investing in energy efficient equipment, loan guarantees to free up access to credit and a state backed guarantee scheme to provide export credit insurance, which has now dried up," said Croughan.
 

 "Measures such as these are no more than Governments across the world are implementing to help combat global recession. Governments in the EU are responding to calls from the European Commission to coordinate a recovery programme in a variety of aids to business, from reducing social charges and energy costs to providing loan subsidies, loan guarantees and export credit insurance. Ireland cannot stand apart from this."

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