The government welcomed the drop in the December unemployment and youth unemployment figures but warned that the jobless total was still expected to rise again before the summer.
ONS Statistics show a 7,000 drop in the ILO measure of unemployment, a 15,000 drop in the claimant count and a 7,600 drop in the youth claimant count in December. The employment level fell by less than in previous quarters and the number of vacancies increased. A significant increase in the number of full time students has increased the inactivity figures.
These figures mean that unemployment is 450,000 lower than predicted at the time of the Budget, reflecting the 5bn extra investment in expanding education and training, supporting jobs and helping the unemployed back to work. Even more support for young people is being introduced later this month.
Secretary of State for Work and Pensions Yvette Cooper, said:
"The jobs market is still tough for a lot of people, but the drop in unemployment and youth unemployment is very welcome. It means 450,000 fewer people are out of work than everyone expected last spring. The extra investment in jobs, education and training is making a real difference, helping people through the recession and preventing the kind of unemployment we saw in the eighties and nineties.
"However we know that things will still be difficult and unemployment is still likely to rise over the next few months. That is why we are determined to keep increasing the help and support to get people into jobs and training."
Minster for Employment Jim Knight, said:
"These figures show the largest number of people coming off unemployment benefit for 15 years which is a sign that our 5bn investment to get people back to work is having an impact. The fact that tens of thousands more young people are taking up the Government's guarantee of a place in education or training means that they are getting the valuable skills they need to get into work.
"New figures published today show that more than 25,000 people have benefited from the new Six Month Offer, while the sixth round of winning Future Jobs Fund bidders will create almost 6,000 more jobs for young people. This brings the total number of successful bids to create jobs through the Fund so far to almost 104,000. This is in addition to more than 400,000 people who have been helped into jobs through the Job Centres' Local Employment Partnerships."
Today's employment figures published by the Office for National Statistics show:
ILO unemployment fell by 7,000 on the quarter to 2.46 million (7.8%).
The number of people claiming JSA fell by 15,200 on the month to 1.606 million (5pc compared to around 10pc in the 80s and 90s).
The number of young people classed as ILO unemployed fell by 16,000 on the quarter to 927,000 these figures include 269,000 who are actually students in full time education but are looking for work, including part time work.
Excluding full time students, the number of young people ILO unemployed is 658,000, and dropped by 26,000 on the quarter.
The number of young people claiming JSA fell by 7,600 on the month.
Number of vacancies has increased by 16,000 to 448,000.
The number of people in work has decreased by 14,000 on the quarter to 28,921m
The number of people classed as economically inactive rose by 79,000, but this includes an 81,000 rise in the number of students.
If you take out students economic inactivity fell by 2,000 on the quarter.
The overall number of people classed as economically inactive includes a record number of over 2 million students.
In stark contrast to previous periods of economic downturn when the numbers on inactive benefits rose dramatically, in this recession the numbers on Incapacity Benefit/Employment and Support Allowance have remained broadly similar while the number of lone parents receiving income support has continued to fall.
Government is today announcing successful bids for a further 6,000 youth jobs, as part of the future jobs fund to be delivered over the next 18 months
From next week all young people out of work and claiming JSA for six months or more will be guaranteed a job, work focussed training or work experience
CBI COMMENTS ON UNEMPLOYMENT FIGURES
WARNS OF REGULATORY RISK TO JOB CREATION
The CBI today commented on the latest unemployment figures. Katja Hall, CBI Director for Employment Policy, said:
The unemployment figures today are better than expected. One major factor behind this is the flexibility of the UK labour market, which allows companies and their staff to take action quickly to protect jobs and create new ones to meet upturns in demand.
That is why we are urging ministers to think very carefully about regulations to come into effect next year which will add to the cost of using temporary agency workers. Employment agencies help over a million job-seekers find work, and allow companies to create jobs quickly and efficiently. Ministers must not undermine this important means of job creation.
Latest unemployment figures show more positive moves in jobs market
Unemployment has fallen to 2.46 million the first time in 18 months - according to the latest Office of National Statistics figures published today.
According to the ONS, the number of people out of work fell 7,000 in the period between September and November, while at the same time numbers taking on part-time work had risen considerably.
These latest ONS figures support data produced by the REC over the past six months including Report on Jobs, which has shown that the jobs market is improving.
The RECs January JobsOutlook published yesterday had more positive news with 94 per cent of employers saying they were not planning any more job losses with one in five expecting to increase their permanent workforce in the next 12 months.
Kevin Green, the RECs Chief Executive said of the figures: The REC was the first business organisation which predicted the jobless total would not reach the three million mark. Todays figures are positive news and tie in with the more upbeat feedback we are getting from members on the ground.
Our own data indicates that the labour market is now in recovery mode although it is still a difficult time for recruiters and the road back to full employment will be slow. Looking ahead, our key messages to government will focus on the need to harness the positive contribution of the industry and to implement new employment regulations in a way that does not hinder future job opportunities.
Jobs figures show more young people turning to study to avoid the dole
Dr John Philpott, Chief Economic Adviser at the Chartered Institute of Personnel and Development (CIPD), comments as follows on official labour market statistics published earlier today by the Office for National Statistics (ONS):
The latest unemployment figures are good news on the face of things, but only on the face of things. Taken in the round, the latest figures show that the UK jobs market remains in a far from healthy state and it would be wrong to conclude that unemployment has peaked.
The number of people in work fell slightly in the three months to November 2009, another sharp drop (-113,000) in people working full-time not quite being fully offset by another rise in part-time employment (99,000). The number of people working part-time is now at a record 1.03 million, as they are unable to find a full-time job.
The reason for the fall in unemployment in the quarter is a jump of 81,000 in the number of economically inactive students indicating that ever larger numbers of young people are turning to study to avoid the dole. This is desirable as an alternative to unemployment although it remains to be seen whether education or training is merely a stop-gap choice for thousands more young people rather than providing a genuine boost to their subsequent job prospects.
A worrying feature of the latest figures is an indication that job prospects for the over-50s may have started to deteriorate for the first time since the start of the recession in 2008. The over-50s not only suffered a quarterly fall in employment but were also the only age group to register a rise in unemployment (up by 15,000).
Men continue to fare less well than women in terms of employment, women benefiting more from the rise in part-time jobs. However, more women entered the labour market in search of work in the three months to November while more men exited the market, with the result that female unemployment increased and male unemployment decreased. There are now more than 1 million jobless men outside the labour market and thus not counted as unemployed who say they want a job.
Finally, the ONS newly published Average Weekly Earnings (AWE) measure which replaces the Average Earnings Index paints a stark picture of the pay squeeze on private sector workers during the recession and the degree to which pay has continued to rise relatively rapidly in the public sector. The total weekly pay of private sector workers actually fell in most months of 2009, whereas in the public sector pay growth of well over 3% was common. This disparity will need to be tackled as the government gets to grips with reducing the fiscal deficit.