Last week's solid purchasing managers' surveys for January supported the scepticism expressed in a previous post about the official assessment that underlying GDP performance (i.e. after adjusting for the impact of bad weather in December) was "flattish" in the fourth quarter.

Further evidence that the economy is still expanding is provided by the Monster employment index, which tallies vacancies posted on job boards (not just monster.co.uk) and corporate career sites. After adjusting for seasonal variation, the index rose sharply in January, reaching its highest level since November 2008. This confirms the message of the Reed job index released last week. (The Reed index covers only opportunities posted on reed.co.uk and has a shorter history than the Monster survey.)

The Monster index tracks or leads the official vacancies series – see chart. Vacancies are a coincident indicator of GDP and lead employment. The January increase, therefore, suggests that GDP is growing solidly in early 2011 while employee numbers will rise over coming months, reversing a small decline in late 2010.

Consensus pessimism about labour market prospects partly reflects worries about public-sector job losses but these are scheduled to be staggered over several years. Of a 330,000 fall in general government employment between 2010-11 and 2014-15, the Office for Budget Responsibility projects only 40,000 to occur by March 2012.