Youth unemployment and start-up figures showing gradual improvement

by Startacus Admin

The picture for young people and employment hasn’t been particularly rosy of late, although recent figures released by the Office for National Statistics about the last three months of 2013 show that there is some sign of recovery.

According to the ONS, the number of 18-24 year-olds out of work was at its lowest for over two years, standing at 19.9%.

Although this is good news, particularly for those young people who fear that employment opportunities are as rare as ever, some people sounded a few notes of caution. Of the quarterly figures, Shadow Employment Minister Rachel Reeves said to The BBC’s website:

“While today's fall in overall unemployment is welcome, the government must not be complacent," she said.

"More than 900,000 young people are still unemployed and over 250,000 young people have been unemployed for over a year," she then went on to add.

Long-term woe

Despite a gradual improvement, with more than quarter of a million young people having been out of work for so long, it shows that opportunities for employment of any kind remain thin on the ground. The actual rate of unemployment rose slightly to 7.2%, owing to an anomaly in the stats published for the last quarter.

This recent statistic could possibly help to stave off the threat of an interest rate rise, which could happen if overall unemployment falls below 7%. Rosemary Okolie, Market analyst at City Index, explained:

“The small rise in unemployment rate to 7.2% was somewhat surprising given that expectations were that the rate would likely stay the same.  It does, however, reinforce belief that interest rates are likely to stay put for the time being.

She added: “The initial interest rate rise target was an unemployment rate of 7%, however additional variables were added last week, putting at bay an imminent interest rate rise.  The latest unemployment rate reinforces that view. “

Wave of entrepreneurship

What has been a prevailing trend in job figures is the big increase in the number of people declaring themselves as self-employed. Young people are no exception to this trend, as the number of start-up businesses set up by 18-24 year-olds has almost doubled in the past year. Perhaps it could be as a response to the lack of jobs available, particularly for frustrated graduates looking for work.

The growth in youth entrepreneurship could be down to more than just a lack of full-time roles. It could be attributed to the ease with which setting up a business can be done, particularly online as it can be easy to sell a product or offer a service online without having to fork out for a new office, furniture and such. Marketing through social media can also make it possible for young people.

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Published on: 28th February 2014