Tuesday 19th February
Yesterday I wrote about the strange phenomenon of a sudden sea mist which engulfed me.
And the metaphor is appropriate for the economy too. It seems as though we too are engulfed in a mist, created partly by so much contradictory data. Does anyone have a clue what is happening? One day we get a PMI (Purchasing Managers Survey) indicating that orders or exports are picking up, and the next the already awful GDP figures are revised down yet again. And it certainly feels chilly out there; sales are consistently down year on year, and in my industry that is down on the year before that which in turn was down on the year before that. Even Supermarkets, the mainstay of the economy are suffering.
And yet we are seeing figures for employment rising, and those unemployed have now fallen to just below 2.5 million. So what is happening here? There are one or two special factors, such as the raising of the school-leaving age from 17 to 18, where the usual crop of those failing to get into college or on some apprenticeship scheme or indeed a job would normally be swelling the ranks of the unemployed have had a year’s respite. But the rise of part-time working is I believe the real answer to this conundrum. Far more of us, especially the young, are working shorter hours, often less than 20 hours a week, because any job is better than none at all.
But how do they manage at all. Fares keep rising and most of these youngsters do not own a car. Most of them still live at home, and for far longer. It is quite common for over 25’s to be still living with Mum and Dad, paying little if any rent. Which simply means those parents spending is also limited by these never nest-departing children.
And there seems no end to it, the recession, depression, stagnating economy, whatever you want to call it seems to be feeding on itself. Most of the coalitions cuts are only just coming in to play and will only depress the economy further.
I am sure that in a few weeks time George Osborne will stand up and commend his ‘Budget for Growth’ to the house to much Tory applause. Unfortunately he has had three budgets for growth already and none of them had made a jot of difference. We are still engulfed in mist.