Source: CSO

The seasonally adjusted Live Register total increased from 326,100 in January to 352,800 in February, an increase of 26,700, according to the CSO. The annual rise is 165,000 or 90%. Ulster Bank said today, that the unemployment rate will rise to 14% by end 2009.

In the year to February 2009, there was an unadjusted increase of 164,952 (+87.1%). This compares with an unadjusted increase of 146,412 (+80.7%) in the year to January 2009.

Other features include:

The monthly increase in the seasonally adjusted series consisted of an increase of 18,200 males and an increase of 8,500 females.

The standardised unemployment rate in February was 10.4%. This compares with 7.7% in the fourth 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 27,777 males and 25,977 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 September to November 2008, is 170,700 persons unemployed.

Lynsey.Clemenger, economist at Ulster Bank commented:

The latest Live Register figures add to the Government’s fiscal headache, as dismal Exchequer figures have prompted a mini-budget to prevent the deficit from breaching 9.5% of GDP. Following a record rise of 33,000 last month, the number claiming unemployment benefit rose by a further 26,700 in February. Although the monthly increase is lower than last month (8.2% versus 11.3%), we expected that this would be the case, given that the January figures were impacted by a pronounced shakeout in employment after the Christmas holidays.

The Live Register total now stands at 352,800, the largest on record. Compared with a year ago, the total is up 165,000, or almost 90%. Given that we estimate that each additional 10,000 workers on the live register costs the exchequer about €150 million in social welfare benefits and lost tax revenue, the cost so far has been on the region of €2.5 billion. We anticipate that the total claiming unemployment benefit will average 460,000 in 2009, which implies an overshoot in spending of €1.25 billion, and a tax loss of about half that again, compared with the January budget estimates.

Significant job losses in services sector imminent …

Males made up 18,200 or almost 70% of the total monthly increase in claimants in February - a clear indication that layoffs in construction and related industries 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 8,500, and the total up almost 90% on a year earlier.

We have highlighted the more broad based weakness in the Irish labour market, outside of construction, for some time now. This was further confirmed in the latest Quarterly National Household Survey (QNHS) for the fourth quarter of 2008, which showed employment losses are mounting in the services sector, particularly in Wholesale and Retail. Going forward, we expect ongoing job losses in construction and related industries, however, we also expect a more pronounced decrease in employment in the services sector (driven mainly by job losses in Wholesale and Retail, and Financial and Business Services), and also in manufacturing as the year progresses.

Irish Unemployment 1983- 2009  - - Source: Ulster Bank

Unemployment rate to hit 14% by end 2009…

The Live Register estimate of the unemployment rate was 10.4% in February, up from 9.6% in January. Unemployment is therefore at levels last seen in 1997. The official unemployment figures are those contained in the QNHS, the most recent of which showed an unemployment rate of 7.7% for the fourth quarter of 2008 (Sep-Nov). The Live Register under-estimated the unemployment rate for this period (7.4% versus actual 7.7%), and therefore all months since have been revised upwards - hence the January rate is now 9.6%, from 9.2% previously. This is the second quarter in a row in which the official unemployment measure has outstripped the live register estimate, which given that it does not include part-time workers, indicates that full-time unemployment is rising. That is, those who had been previously part-time unemployed are increasingly moving into full-term unemployment as the economic situation worsens.

The labour force fell by 15,000 in Q4 of 2008. While we expect that it will continue to decrease in coming quarters, the falloff is considerably less than would be the case if the global economy were not in recession also. As a result, the numbers unemployed will rise at a significantly greater pace than the decline in the labour force, and we see the unemployment rate hitting 14% by the end of this year. This will take us back to back at late 1980s levels, when the labour force was almost half the size. \