View from City Road: Reasons for jobless fall

The markets saw the unexpected 22,000 fall in unemployment in February as further evidence that the economy is picking up, perhaps more strongly than expected. The main reason for the drop in unemployment is a fall in the number of people joining the count. Such inflows have traditionally been volatile near a turning point.

However, the sharp rise in vacancies appears to be the result of previous computer under-recording. Nor do the figures for jobs in the economy yet show any rise, although they are less timely, referring only to last year.

It does, though, seem possible that the unemployment figures are benefiting from a shrinkage in the workforce as much as a rise in economic activity. More 16-year-olds are staying on in school. In the South- east, unemployed men may be staying at home to care for the children while the wife continues to work. The unemployment figures are encouraging, but not yet conclusive.