Small rise in UK unemployment 'better than expected'

Published by Jon Land for 24dash.com in Central Government and also in Communities

Unemployment held virtually static at 2.47 million in the three months to August with a rise of 88,000, better than expected official figures showed today.

The number of people claiming jobseeker's allowance rose by 20,800 in September from a revised August figure to 1.63 million, according to the Office for National Statistics (ONS). This is the lowest increase since May last year.

Despite fears of rising youth unemployment, the number of young people looking for a job reduced fractionally in the quarter to August, to 946,000. The previous three-monthly figure to July, of 947,000, was the highest since ONS records began in 1992.

Work and Pensions Secretary Yvette Cooper said: "These figures show families across the country are still being affected by the global recession.

"Although unemployment isn't as high today as many feared it would be at the time of the Budget, it remains a serious problem, which is why we must keep increasing support and advice to get people back into jobs.

"We will not leave them on their own."

Ministers announced that as part of the Government's support for young people, 5,000 new jobs will be created under the Future Jobs Fund, taking the total to almost 60,000.

Young people in Barnsley, London and Hove have already started work through the fund in a range of different sectors, the Government said.

Employment Minister Jim Knight said: "I am pleased to announce another 5,000 jobs, created through the Future Jobs Fund, taking the total to almost 60,000 so far.

"These jobs are just one of the ways the Government's extra investment is helping people to get back into work. Our £5 billion injection to support jobseekers is helping people at every stage.

"Whilst 70% of people still leave jobseeker's allowance within six months, those who remain unemployed for longer get extra help through the new six-month package, local employment partnerships and the Future Jobs Fund."

Paul Kenny, general secretary of the GMB union said: "Bad as these figures are, there are some tentative signs of a very fragile recovery in the economy, which is due in no small part to the monetary policy being followed by the Bank of England and the fiscal policies of the Treasury.

"At last week's Tory party conference David Cameron called for an end to the discretion of the Bank of England on quantitative easing, while the shadow chancellor threatened to slash public spending.

"Make no mistake, if such policies are put into effect, we will see five million unemployed as forecasted by a prominent member of the Monetary Policy Committee."

Further signs that the labour market could be stabilising came from the number of vacancies, which have fallen in every period since April last year.

These held firm at 434,000 in the three months to September.

The jobless rate also remained stable in the month, at 7.9%. This is the first time it has stayed the same since the three months to March last year, having increased in almost every intervening period.

The total number of people out of a job slid back by 1,000 in real terms from the three months to July, meaning that the figure has pulled back from a 14-year high.

Redundancies in the three months to August were down 68,000 on the previous period's near record high to 233,000.

Average earnings including bonuses increased at a rate of 1.6% in the period, down 0.2% on the previous month.

Excluding bonuses, the growth rate was 1.9%, which was the lowest growth rate since records began in 2001.

Ms Cooper held out the hope that employment may recover more swiftly after the economy returns to growth than in previous recessions.

Traditionally, economists expect a lag between the end of a recession and a recovery in the labour market, as companies continue to shed workers even after they have returned to growth.

Appearing before the House of Commons Work and Pensions Committee this morning, Ms Cooper declined to predict when unemployment would peak, and said it was "very hard to tell" how it would develop.

But she added: "It may be that the traditional lag that everybody talks about between what happens to growth and what happens to unemployment may be narrowing...

"The Chancellor's forecast is that the economy will start to grow before the end of the year. In previous recessions, unemployment has continued to grow after the economy has started growing.

"But for a series of reasons - partly because people have been kept closer to the labour market this time and because we have had a stronger jobseekers' regime, partly because businesses seem to have been behaving in a different way - it does look as if the economy is behaving in a different way compared to the early 1990s.

"That may mean that there is a shorter gap between the economy starting to grow and unemployment starting to come down."