Wednesday, April 13, 2011

Unemployment more or less flat

UK unemployment falls by 17,000 to 2.48m

Some selective quotes and my comment on them: "Total pay rose by 2% compared with a year earlier" - An inflation adjusted fall of about 2% "with the jobless rate for young people remaining above 20%." - A bit of a tragedy really. The government will have to spend some money on this. "The Office for National Statistics (ONS) said the rate of unemployment in the UK had fallen to 7.8%." - the government is clearly not making the claimed spending cuts.

Posted by flashman @ 10:12 AM (2464 views)
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21 thoughts on “Unemployment more or less flat

  • mark wadsworth says:

    Well, there goes Flashman’s great leading indicator for house price falls.

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  • mark: I was trying to divert attention from that!

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  • I still reckon there should be a stat for total earned income and I can’t believe it would be that hard to calculate. That would give meaningful information about the jobs that people have i.e. lots of people aren’t classed as unemployed for various reasons and lots more have part-time jobs. If we knew the total amount of income earned that would give us insight into collective spending power.

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  • The difficulty i see in the long run is we are going to have a huge number of young to middle aged adults clogging up the system with relatively little or no skills… just degrees or masters…

    That ill hit the prosperity of this country in the long term and should be seen in my opinion as a far more important item to focus on than say… the NHS. Controversial as this may seem, infrastructure, investment in sciences and education are so fundamental for the long term prosperity and getting out of this hole we are in I would be happy to sacrifice the NHS by 25% or more for it.

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  • Well, there goes Flashman’s great leading indicator for house price falls.

    Don’t give up yet. I’m seeing an almight squeeze on. Probably only a matter of time before something gives. Sentiment is the blackest I’ve seen for a long time.

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  • It’s doesn’t look easy to spin this; HPC seems to be slipping away.

    “The ONS figures showed that average earnings rose by 2% in the year to February, while earnings excluding bonuses grew by 2.2%. Both measures were well below the rate of inflation,”

    Unless we see substantial wage growth in the future, the prospects for the next generation of workers owning their own place don’t look good either. I wonder what sort of country we will look like in another decade if we can keep gently inflating away real wages while propping up house prices?

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  • Three people are made redundant. Two of them find work for two and half days a week. How many people are now counted as being unemployed – one or two?

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  • quiet guy: “HPC seems to be slipping away”

    It does rather. If commodity prices come off a bit (and that’s an incredibly big if), we could have a scenario with moderate growth, low inflation, low interest rates and gently falling/stable unemployment. All, or none of these conditions might come to pass but whatever happens it is looking unlikely that the unemployment number will increase by the 300,000 that is probably necessary to have a proper balls out house price crash

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  • mark wadsworth says:

    F, don’t forget all the other props under house prices. It would be nice to think that the real economy will recover (in the medium term, it always does) but why would equilibrium house prices now be double their long term average?

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  • mw: Agreed. I think that inflation might account for a drop off in real house prices over the next few years. I also think that the government might do a tax raid on property, once the economy is on a sounder footing. It is only a balls out HPC that I have doubts about

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  • mark wadsworth says:

    Flash: “I also think that the government might do a tax raid on property, once the economy is on a sounder footing”

    Hmmm. That bit I very much doubt (although it would be nice if done properly).

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  • @5 Quiet guy “It’s doesn’t look easy to spin this; HPC seems to be slipping away”

    Sorry to be pessimistic, but in parts of N Hampshire now houses seem to be selling as soon as they come to the market with bidding pushing up prices beyond the asking price. The problem anecdotally for people seeking to upgrade in the same area from 3 to 4 beds is that selling their own house may take only days, but there is a shortage of houses to move into leaving them with a dilemma regarding when to put their house on the market. Chicken and egg situation.

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  • mw: They have systematically raided everything else until property is the only not fully raided thing left. They badly want the money. Pensions were once considered untouchable but they craftily identified a time when they could get away with it. My best guess is a raid on second homes, BTL homes, empty homes or foreign held stamp duty dodging homes. They sadly wont have the nerve (for now) to impose capital gains tax on private property … or what’s that other tax you occasionally mention?

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  • mark wadsworth says:

    The other tax I mention is a return to good old fashioned Domestic Rates (like in Northern Ireland but without the £400,000 upper capital limit) and/or good old fashioned Schedule A taxation; or in a modern context, it means having more Council Tax bands – from £100 a year in Band A to £10,000 a year in Band Z.

    Now, as a simplification campaigner, I believe could easily roll all this into a Single Tax, but hey, maybe that’s just me.

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  • MW/Flash why can’t they just scrap SDLT when buying and make it a straight % when selling instead. It’s a long way from LVT I know but is much more like CG tax and could be sold to voters on the basis that it helps FTB’s. Or am I missing something obvious?

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  • mark wadsworth says:

    TT, it makes absolutely no difference whether buyer or seller pays the SDLT – in economic terms, it is always borne by the seller/owner, just like all taxes on land.

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  • MW – Huh? buyers pay SDLT not sellers…

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  • mark wadsworth says:

    TT, I know perfectly well that buyers are legally liable to pay SDLT, this is my full time job.

    It has been observed in practice (i.e. when Labour had these “SDLT free zones” in marginal constituencies) that selling prices went up by exactly the amount of the SDLT “saving” so the cut benefits the SELLER not the BUYER.

    It’s basic economics – price elastic demand but fixed supply, and the general observation applies to all taxes on or subsidies to land ownership – they always are borne by/of benefit to the SELLER/OWNER/LANDLORD (and there are infinite real life examples to illustrate these).

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  • MW – I wasn’t being entirely serious. I didn’t think for one nano-second that there was anything about tax you didn’t know. Although by your tone you could also secure employment as a teacher I suspect…
    I understand your point (i.e. the SDLT free zones) but I can’t believe that this symptom wouldn’t disappear over time. It’s a very obvious reaction to a tax holiday to say “super – I’ll just add that to the asking price” but this response wouldn’t last forever. Nobody would be selling a house in 100 years time thinking “right, it’s worth £2million quid but I can ask for 2.2million because there used to be this thing called SDLT which buyers had to cough up but they don’t anymore”. Anyone going for a new job negotiating a salary quotes gross, knowing full well they will have to pay tax on it – that’s just the norm. It just seems fundamentally wrong to charge a buyer tax when houses are now “assets” not homes.

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  • I don’t understand the concept of stamp duty, let alone its nonsensical scales. I also don’t like VAT because it penalises people who earn less. I’d have a flat rate of income tax for everyone, with no thresholds and a CGT (at the same rate of tax as income tax) on absolutely anything that is sold at a profit. CGT tends to be borne by the richer members of society, so in that regard it is the opposite to VAT

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  • the number cruncher says:

    MW et all

    Could unemployment have gone down because of the crash in commercial rents and land which is disjointed from domestic house prices? Lower rents of commercial properties could have opened up the scope for new business to become viable when they where not before the crash, irrespective of the contraction of effective demand.

    I would be interested in your thoughts.

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