Best of the Week
Most Popular
1. Will Gold Price Breakout? 3 Things to Watch… - Jordan_Roy_Byrne
2.China Invades Saudi Oil Realm: PetroDollar Kill - Jim_Willie_CB
3.Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - Nadeem_Walayat
4.The Stock Market Trend is Your Friend ’til the Very End - Rambus_Chartology
5.This Isn’t Your Grandfather’s (1960s) Inflation Scare - F_F_Wiley
6.GDX Gold Mining Stocks Fundamentals - Zeal_LLC
7.US Housing Real Estate Market and Banking Pressures Are Building - Chris_Vermeulen
8.Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - Buildadv
9.Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - Nadeem_Walayat
10.Warning Economic Implosion on the Horizon - Chris_Vermeulen
Last 7 days
Stock Market Predictive Modeling Is Calling For A Continued Rally - 22nd Apr 18
SWEATCOIN - Get PAID to WALK! Incentive to Burn Fat and Lose Weight - Review - 22nd Apr 18
Sheffield Local Elections 2018 Forecast Results - 22nd Apr 18
How Long Does it take for a 10%+ Stock Market Correction to Make New Highs - 21st Apr 18
Sheffield Ruling Labour Party Could Lose 10 Council Seats at May Local Elections - 21st Apr 18
Crude Oil Price Trend Forecast - Saudi Arabia $80 ARAMCO Stock IPO Target - 21st Apr 18
Gold Price Nearing Bull Market Breakout, Stocks to Follow - 20th Apr 18
What’s Bitcoin Really Worth? - 20th Apr 18
Stock Market May "Let Go" - 20th Apr 18
Overwhelming Evidence Against Near Stock Market Grand Supercycle Top - 20th Apr 18
Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - 20th Apr 18
The Incredible Silver Trade – What You Need to Know - 20th Apr 18
Is War "Hell" for the Stock Market? - 19th Apr 18
Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns - 19th Apr 18
Breadth Study Suggests that Stock Market Bottom is Already In - 19th Apr 18
Allegory Regarding Investment Decisions Made On Basis Of Government’s Income Statement, Balance Sheet - 19th Apr 18
Gold – A Unique Repeat of the 2007 and How to Profit - 19th Apr 18
Abbeydale Park Rise Cherry Tree's in Blossom - Sheffield Street Tree Protests - 19th Apr 18
The Stock Market “Turn of the Month Effect” Exists in 11 of 11 Countries - 18th Apr 18
Winter is Coming - Coming Storms Will Bring Out the Best and Worst in Humanity - 18th Apr 18
What Does it Take to Create Living Wage Jobs? - 18th Apr 18
Gold and Silver Buy Signals - 18th Apr 18
WINTER IS COMING - The Ongoing Fourth Turning Crisis Part2 - 18th Apr 18
A Stock Market Rally on Low Volume is NOT Bearish - 17th Apr 18
Three Gold Charts, One Big Gold Stocks Opportunity - 17th Apr 18
Crude Oil Price As Bullish as it Seems? - 17th Apr 18
A Good Time to Buy Facebook? - 17th Apr 18
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm - 16th Apr 18
Bombs, Missiles and War – What to Expect Next from the Stock Market - 16th Apr 18
Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold - 16th Apr 18
Will Bitcoin Ever Recover? - 16th Apr 18
Stock Market Futures Bounce, But Stopped at Trendline - 16th Apr 18
How To Profit As Oil Prices Explode - 16th Apr 18
Junior Mining Stocks are Close to Breaking Downtrend - 16th Apr 18
Look Inside a Caravan at UK Holiday Park for Summer 2018 - Hoseasons Cayton Bay Sea Side - 16th Apr 18
Stock Market More Weakness? How Much? - 15th Apr 18
Time for the Gold Bulls to Show their Mettle - 15th Apr 18
Trading Markets Amid Sound of Wars - 15th Apr 18
Sugar Commodity Buying Levels Analysis - 14th Apr 18
The Oil Trade May Be Coming Alive - 14th Apr 18

Market Oracle FREE Newsletter

Trading Lessons

UK Unemployment Falls Inline With Forecast Trend Expectations

Economics / UK Economy Jul 14, 2010 - 08:21 AM GMT

By: Nadeem_Walayat

Economics

Best Financial Markets Analysis ArticleThe previous Labour government's debt fuelled election bounce continues to have a positive impact on the UK economy as the number of unemployed for May fell to 2.47 million down by 34,000 in the three months to May. However whilst the ConLIb government may try and claim some credit from Labours lagging unemployment news, the headline figure masks several problem areas such as the rise in the long-term unemployed up by over 60,000 to 787,000.


The previous Labour government bent over backwards to prevent unemployment soaring during the recession in the run up to the General Election which caught many academic economists out who had been penciling in a rate of as high as 3.4 million by now. Instead Labour measures of boosting the public sector employment, enabling distressed companies delaying tax payments and a more flexible workforce that cut hours and days worked instead of becoming unemployed resulted in a far shallower rise in UK unemployment that came in remarkably close to my trend forecast of October 2008 that forecast a rise in UK unemployment to 2.5 - 2.6 million by April 2010.

UK Unemployment Forecast 2010-15

The ongoing downtrend in the headline unemployment figures is inline with the current trend forecast (01 Jul 2010 - UK Unemployment Forecast 2010 to 2015 ) for a dip into September 2010 which represents the calm before the storm to follow the implementation of the ConLib governments cuts of an estimated 500,000 public sector workers with an additional 500,000 private sector workers also destined to lose their jobs against which there is expected to be an increasing number of new business start up's employment. The job market remains tough for the unemployed with plenty of slack remaining in the economy as those forced to become part timers will be first in the queue during the economic recovery to regain full time employment rather than existing firms employing new workers. To illustrate this the number of part timers hit a record of 7.82 million.

On a positive development the number of those employed surged by 160,000. However as I explained in the UK unemployment forecast between 60% and 70% of new jobs will go to migrant workers, especially as workers from distressed euro zone PIGS such as Greece and Spain with soaring unemployment rates of over 20% will seek to gain employment in the far less distressed and more liberal UK jobs market. The figures show 160,000 jobs created against an unemployment drop of 34,000 points to a ratio of 79% which is precisely inline with the experience of the last Labour Government where 4 in 5 new jobs went to migrant workers.

Negative Average Earnings In Real Terms

The impact of the government's INFLATION stealth tax on workers and savers was further illustrated today as average wages increased by just 2.7% which is against CPI inflation of 3.2% and the more recognised inflation measure RPI at 5% which is implying a real terms cut in pay of 2.3%, with much worse to come as UK high inflation is expected to continue well into 2011 against low pay and for many people pay freezes continuing for several years therefore ensuring that the people of Britain will see their standards of living eroded by means of Inflation so as to finance government deficit reduction, total debt interest and the bailout of the banking sector.

Protect Your Savings and Wealth

The Inflation Mega-Trend Ebook (FREE DOWNLOAD) covers at length the whole on going theft of value of savings and wage purchasing power, but more importantly contains 50 pages of what people can do to protect their wealth.

If you keep your money in the bank or building society then you are letting the bankster's gradually steal the value of your savings as the rate of return to beat CPI inflation and the 20% savings tax will need to be about 4%, instead the banking sector typically offers depositors less than 2% for instant access accounts and less than 2.75% for 1 year fixes. The easiest and safest way for investors to protect themselves immediately is ironically a government backed product, the National Savings Index Linked certificates that pay 1%+ RPI Inflation that's 1% Plus 5% if inflation remains at 5% for the next 12 months. The actual formula is based on the RPI indices at anniversary against where it stood at the time of Purchase.

More advanced mechanisms for protecting your wealth such as investing in safe big cap cap dividend paying stocks, commodities such as oil and gold and silver and wheat which is particularly cheap at the moment, and other fiat currencies that are expected to appreciate in the long-run such as the Chinese Yuan, Aussie Dollar are covered at length in the Inflation Mega-Trend Ebook.

Bottom Line - You NEED to protect your wealth from the government and the Bank of England that will seek to steal the value of your wealth and earnings by means of INFLATION. The government has no choice but to print money and monetize debt. There is no other way out, yes there will be the occasional deflationary ripples but the worlds economies swim in an ocean of inflation as evidenced by the RPI and CPI Inflation indices which ensure the Inflation Mega-Trend will run not for months, or even years but decades.

Comments and Source: http://www.marketoracle.co.uk/Article21096.html

By Nadeem Walayat p[

http://www.marketoracle.co.uk

Copyright © 2005-10 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on UK inflation, economy, interest rates and the housing market and he is the author of the NEW Inflation Mega-Trend ebook that can be downloaded for Free. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 500 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Raj
14 Jul 10, 17:28
House Prices

Hi Nadeem,

As always thanks for the articles,

When do you think you will be updating your graph for house prices into 2015?

Cheers


Nadeem_Walayat
14 Jul 10, 18:24
house prices

The aim is to arrive at that destination by mid August.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules