Record Rise In Unemployment
UK unemployment rose by a record 281,000 to 2.38 million in the three months to May, the Office for National Statistics has said.
The jobless rate increased to 7.6%, the highest in more than 10 years.
The number of people claiming unemployment benefit increased by 23,800 in June to 1.56 million, which was less than analysts had forecast.
Unemployment among young people has been especially acute, as firms cut jobs to reduce costs in the downturn.
Fear of unemployment
Young people - those up to 24 years old - have been particularly hard hit with unemployment leaping to a 16-year high of 726,000.
The number of those out of work for more than a year rose by 46,000 to 528,000, the highest for 11 years.
TUC general secretary Brendan Barber said: "It's particularly worrying that over half a million unemployed people have been out of work for at least a year, including 133,000 young unemployed people."
"With a new generation of school and college leavers soon starting to look for work, our unemployment crisis will get even bigger.
Ian Brinkley, Associate Director of The Work Foundation said: The latest figures show steep increases in unemployment and large scale job loss. However, although the overall figures are bad, the labour market is doing better than patterns seen in previous recessions. People are not being shunted off the claimant count into long term sickness related benefits, nor are they dropping out of the active labour market entirely.
Unemployment jumped by over 280,000 comparing the three months to May 2009 with the previous three months, taking the unemployment rate to 7.6 per cent and the total of unemployed people to just under 2.4 million. The rate of job loss appears to be accelerating once more after an apparent pause. This is likely to be a consequence of the fall in GDP earlier this year unemployment is a lagging indicator and is likely to continue rising for some time after the economy starts growing again.
The number able to claim Job Seekers Allowance went up by only 7,000 in June. Even if we adjust the figures to make a more like-for-like comparison with the period covered by the International Labour Organisation (ILO) measure, the increase in those claiming benefits is still significantly lower than those saying they are actively seeking work.
One reason is that people are still moving off the claimant count in large numbers, and there has as yet been no build up of long-term unemployment (often defined as out of work for more than twelve months). In past recessions people typically either moved off unemployment benefits into long term sickness related benefits and/or dropped out of the labour market completely. There is little sign either is happening so far.
The early stages of the recession were dominated by job losses among the young and full time male workers. We are now seeing significant job losses for older workers and for women - though employment for younger workers is still falling faster than for older workers and male employment is still falling faster than employment for women. This is to be expected as the impact on the labour market deepens and widens.
Katja Hall, Director of Employment Policy, CBI, said: This hefty rise is in line with our forecast and reflects the tough climate that businesses face. Sadly, more and more jobs will be lost in this difficult recession and we expect unemployment to peak at three million next spring.
Businesses and staff are doing their utmost to protect jobs, and in many firms we have seen a spirit of flexibility around pay and hours to try to limit redundancies.
The rise in youth unemployment is particularly worrying and the government must target more help to prevent long-term damage to a generation.
Samantha Weston, Head of Resourcing at Grant Thornton.
"Today's increase in the number of unemployed 18-24 year olds to 726,000 is a worrying figure for the Government and will only rise further as the class of 2009 graduate. However we must be careful not to put graduates off of applying for jobs altogether. We do not want to fall into the trap of the last recession and be left with a dearth of candidates for management positions in a few years time but instead we should be committed to training those entering the job market."
"In this increasingly competitive job market it is also vital that graduates target their applications appropriately, a generic covering letter just will not cut it with employers in this highly competitive market. Graduates need to show that they have a strong understanding of both the firm and the position for which they are applying and what key skills and attributes they can bring to the role."