UK: Jobless total falls to lowest level for a year

UNEMPLOYMENT has fallen to its lowest level for a year after a big jump in the number of people in work, new figures showed today.

The jobless total fell by 46,000 in the quarter to June to 2.56million while the narrower count of those eligible for the Jobseeker’s Allowance fell by 5,900 on a seasonally adjusted basis last month to 1.59 million, the Office for National Statistics said.

Much of quarterly fall in unemployment was recorded in London, suggesting a jobs boost from the Olympic Games. The number of people in work increased by 201,000 to almost 30million, the highest since last summer, with half of the rise coming in London.

However, the picture at local level, where the claimant count totals are not adjusted for normal seasonal variations, was more mixed, with the overall claimant count falling in Suffolk but edging slightly higher in north and mid Essex.

The biggest falls in Suffolk, in each case cutting the local unemployment rate by 0.1 of a percentage point, were in Waveney, where the count fell by 98 to 2,915, (representing a rate of 4.2%), and Ipswich, down 74 to 4,232, (a rate of 5.0%).

There were also 0.1% falls in the jobless rates in Suffolk Coastal, down 28 to 1,358, (1.8%), and Babergh, down 11 to 1,245 (2.4%).

In St Edmundsbury, however, an increase of 12, taking the claimant count to 1,664, saw the local unemployment rate edge 0.1% higher to 2.6%, while increases in Mid Suffolk, up 13 to 1,171, and Forest Heath, up two to 904, left the local rates unchanged, at 2.0% and 2.2% respectively.

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The biggest increase in Essex numerically was in Colchester, where the count was 83 higher compared with June at 3,317, although rounding left the unemployment rate unchanged at 2.7%.

There were also increases in Braintree, up 13 to 2,565, with the rate unchanged at 2.8%, and Uttlesford, up 18 to 706, lifting the rate by 0.1% to 1.5%.

However, the counts fell modestly in Tendring, down 38 to 3,287 (a rate of 3.9%), Maldon, down 18 to 863 (2.2%), and Chelmsford, down five to 2,827 (2.6%), with the rate unchanged in each case.

Work and Pensions Secretary Iain Duncan Smith said the figures were “positive and encouraging”, with the private sector continuing to create jobs despite the difficult economic climate. Unemployment is falling and the claimant count is down,” he added.

However, TUC general secretary Brendan Barber said: “Today’s fall in unemployment is welcome, but there are worrying trends brewing and, with the economy getting smaller, it may only be a matter of time before the dole queues start rising again.”

“Young people in particular are struggling to get their careers off the ground. The number of people under 25 who are neither working nor in full-time education has risen again to nearly 1.5million.”

Howard Archer, chief economist at IHS Global Insight, said: “The labour market continues to defy gravity and is performing remarkably well given the extended weakness of the economy.

“It is very hard to reconcile employment growth of 201,000 in the three months to June, with GDP contraction of 0.7% quarter on quarter in the second quarter, especially as this was a third successive quarter of decline.

“The implication is that either the economy is doing appreciably better than the national accounts data show, the labour market is doing significantly worse than the hard data show, or productivity has genuinely weakened sharply. The jury is currently very much out as to what the actual answer is but it could very well be a combination of all three.”

David Kern, chief economist at the British Chambers of Commerce, said: “The latest job market figures are encouraging, and act as a welcome contrast to recent pessimism about the UK economy, but there are still areas of concern.

“Youth unemployment is unacceptably high, and too many people are still being forced to work part-time as they cannot find a full-time job. While unemployment is likely to increase over the next 12-18 months, the peak may now be lower than the 2.9 million figure we predicted in our last forecast.

“Overall, these figures show positive trends in the UK labour market and are difficult to reconcile with other ONS figures, which show three consecutive GDP declines since the end of 2011.”

John Walker, chairman of the Federation of Small Businesses, said: “While it is good that people are in jobs, these jobs are mainly part-time when people would prefer full-time work.

“Small businesses are key to sustaining the recovery but they need to be supported in enabling a greater number of people to be in full-time work. We have long said that businesses are more likely to take on staff if they receive a tax break. So extending the National Insurance Contributions scheme to existing businesses will go some way in helping to achieve this.”

Neil Carberry, the CBI’s director for employment and skills, said: “This latest labour market data continues the trend of robust performance, given the recent GDP figures. Alongside a rise in overall employment, it’s particularly pleasing to see more people are finding full-time jobs.

“The overall high level of unemployment, especially among young people leaving education, remains a significant challenge. We also need to ensure that the private sector can create jobs across the UK, as the numbers point to a wide variation in regional performance. These need to be areas of particular focus for the Government in the autumn.”

Shadow work and pensions secretary Liam Byrne said: “The headline fall in unemployment today is a welcome respite in a blizzard of bad economic news.

“But today’s figures show we’ve got to redouble our efforts to get Britain back to work. Ninety percent of the fall in unemployment was in London, long-term youth unemployment is still going through the roof and part-time work has hit an all-time high as people struggle to find a full-time job.

“Crucially, there are now huge warning signs on the road ahead. Our economy is not even in the slow lane - it’s in reverse.

“Britain is only one of two G20 countries in recession, and the Governor of the Bank of England says there is little more low interest rates can do.”