Week 41, 2011: Total Unemployment by Duration

Summary: We couldn't look past the big news this week that total unemployment has risen to the highest point since October 1994. While this is of great concern, particularly in relation to youth unemployment which is almost at 1m, there is some relief in that long-term unemployment hasn't yet risen to the levels of 1994.

What does the chart show? The chart shows the total number of people aged over 16 who are classed as unemployed, in thousands, for rolling three month periods. To be officially unemployed, one must be out of work and currently seeking employment. The red line shows the total number, while the blue and yellow lines show the number of people who have been officially unemployed for more than 12 months and 24 months respectively.

Why is the chart interesting? High unemployment is a much more emotive political issue than slow GDP growth, and the figures released this week are causing concern. Much has been made of these being the worst numbers in 17 years. However, there are reasons to think that the crisis we are facing today is not yet as bad as it was in 1994. The rate of unemployment is not quite as bad as back then, for example, due to an increase in total population.

And more importantly, as the chart above shows, the number of unemployed people who have been out of work for over 12 months and over 24 months is not as high as in 1994 either (having said that, these figures are still the worst they have been since 1997). This is despite the fact that two years have now passed since the dramatic increase in unemployment that you can see in 2008, suggesting that almost all of that initial cohort of people have since found a job (or have dropped out of the workforce entirely).

None of this will be of much comfort to the 2.57 million unemployed people, however.