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Unemployment Rate rises to 8.0 per cent

The employment rate for those aged from 16 to 64 for the three months to January 2011 was 70.5%, down 0.1 on the quarter. The number of people in employment aged 16 and over increased by 32,000 on the quarter to reach 29.16 million. The number of people in employment aged 65 and over increased by 56,000 on the quarter to reach 900,000, the highest figure since comparable records began in 1992. The number of people in employment aged between 50 and 64 increased by 25,000 on the quarter to reach 7.32 million, the highest figure since comparable records began in 1992. The unemployment rate for the three months to January 2011 was 8.0% of the economically active population, up 0.1 on the quarter. The total number of unemployed people increased by 27,000 over the quarter to reach 2.53 million, the highest figure since 1994. The unemployment rate for those aged from 16 to 24 increased by 0.8 on the quarter to reach 20.6% of the economically active population, the highest figure since comparable records began in 1992. The number of unemployed 16 to 24 year olds increased by 30,000 on the quarter to reach 974,000, the highest figure since comparable records began in 1992.The number of people claiming Jobseekers Allowance (the claimant count) fell by 10,200 between January and February 2011 to reach 1.45 million. The number of male claimants has fallen for thirteen consecutive months but the number of female claimants has increased for eight consecutive months. The total number of male claimants fell by 17,500 on the month to reach 991,300 in February 2011 but the number of female claimants increased by 7,300 to reach 457,300, the highest figure since October 1996. The number of women aged between 25 and 49 claiming Jobseekers Allowance increased by 5,400 on the month to reach 250,400, the highest figure since comparable records for this series began in 1997.The inactivity rate for those aged from 16 to 64 for the three months to January 2011 was 23.3%, up 0.1 on the quarter. The number of economically inactive people aged from 16 to 64 increased by 43,000 over the quarter to reach 9.33 million. The number of people who were economically inactive because they were looking after the family or home increased by 36,000 on the quarter to reach 2.30 million.The earnings annual growth rate for total pay (including bonuses) was 2.3% for the three months to January 2011, up from 1.8% for the three months to December 2010. This increase in the whole economy annual growth rate for total pay was mainly driven by bonus payments in the finance and business services sector.


REC response to latest unemployment figures

Unemployment figures published today by the Office for National Statistics have shown a rise of 27,000 to 2.53 million people in the number of people out of work in the UK in the three months up until January.

Commenting on the latest statistics Kevin Green, the RECs Chief Executive, said:

There have been positive signs of improving employer confidence and increased hiring activity in many sectors. However, todays figures confirm that the private sector is some way off being able to absorb public sector job cuts.

The continuing rise in the number of people seeking work is what we predicted and we expect this trend to continue over the spring, summer and autumn before starting a slow decline at the end of this year and into 2012.

The onus is now on the Chancellor to announce measures in the Budget next Wednesday which will stimulate the economy and generate job creation. Todays figures highlight the urgent need for the Chancellor to deliver a meaningful Budget for jobs.

The real scandal still remains the number of young people not in work or education. The RECs own Youth Employment Taskforce is reconvening again tomorrow (Thursday) to discuss what can be done to encourage the Government to make this a top priority and to better harness the contribution of employers through apprenticeships, internships and other initiatives.

Today, the REC is also meeting Shadow Employment Minister, Stephen Timms MP, to discuss the findings of the Youth Employment Taskforce report.


Grant Thornton Head of Resourcing comments

Samantha O'Byrne, Head of Resourcing at Grant Thornton UK LLP, says: Todays further rise in unemployment by 0.1% is a clear signal to the Chancellor, one week before he is due to deliver his budget, that serious measures need to be taken to curb the unemployment rate.

The shrinking economy over the last quarter will have had an impact on the already unsteady employment market and the Government is facing a mammoth task in returning UK plc to growth. Speeding up job creation is the only real solution to the problems the country is facing as unemployment has now reached its highest rate since 1994.

Threats in the shape of rising inflation and interest rates have created a tough trading climate for businesses and many have reigned in their expansion plans. It is crucial the Government restores confidence in the economy by creating an environment where jobs can be generated.
Businesses need to be incentivised to create new jobs and it should be made easier for SME owners to take on new people. Initiatives such as young mentoring schemes or apprenticeships should also be encouraged and incentivised.

We believe wholeheartedly that the training of our young people will be crucial to economic recovery and encourage other businesses to instil the same focus. Our shortlisting for best graduate/trainee recruitment strategy at the Recruiter Awards for Excellence is testimony to our hard work in this area, OByrne concludes.


Response from Nigel Meager, Director of the Institute for Employment Studies, to todays ONS unemployment figures.Unemployment grows againThe latest release from the Office for National Statistics again showed the weak state of the labour market. Unemployment on the broader ILO measure rose again in the period November 2010 to January 2011, by 27,000, and stands at 2.5 million. Unemployment is now at its highest since 1994 and the unemployment rate is 8 per cent. The narrower claimant count measure fell by 10,200 in February. The number of people in work (aged 16 or over) increased slightly, by 32,000. There was a growth of 75,000 in full-time jobs which was partly offset by a decline of 43,000 in the numbers working part-time. This growth in employment was driven entirely by an increasing number of older workers, as the numbers aged of 65 and over who are in work increased by 56,000.Excluding the temporary jobs associated with the Census the number of vacancies increased fractionally, by 8,000 from the three months to November 2010.Nigel Meager, Director of the Institute for Employment Studies, commented on the latest figures:The latest release of employment figures from the ONS were something of a mixed bag, but the data once again serve to highlight the fragility in the labour market. Unemployment remains the critical issue. The numbers who were unemployed grew again, with unemployment reaching its highest level for a decade and a half. The small increase in employment did not improve the unemployment picture because most of the increase reflected more people working past the state pension age. It is, nevertheless, a positive sign, following the recent shift towards part-time work, that full-time work is now increasing again. Mr Meager noted that young people and the long-term unemployed stood out as requiring urgent support:Young people have been severely hit by the difficult conditions in the economy. Some 974,000 16-24 year olds are now unemployed, the highest figure since comparable records began. Despite the fact that up to a third of these are full-time students looking for work, the continuing growth in core youth unemployment is serious and alarming. Even short periods of time spent unemployed at a young age can impact negatively on a persons entire working life. The continuing growth in long-term unemployment which stands at 850,000, almost twice the level of two years ago is another development with possibly serious long-term social and economic consequences. It is clear that while the broader policy agenda must focus on stimulating growth in the economy and labour market, there remains a strong rationale for increased targeted interventions to support these groups.

Room for both optimism and pessimism in official jobs figures

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 mixed picture of the UK labour market conveyed in the latest official figures offer room for both optimism and pessimism. The headline rise in unemployment suggests that the labour market weakened at the turn of the year, well before the impact of the Coalition Governments spending cuts and tax rises start to take full effect. Indeed, figures showing that public sector employment had already fallen by 123,000 in the year to December 2010 suggest that the eventual cull of public sector jobs by 2015 could be considerably higher than current Office for Budget Responsibility estimates suggests. However, figures showing more people in work in the private sector, including in manufacturing, and fewer on welfare benefits offers hope that the labour market might withstand the economic headwinds better than previously expected.

On balance the latest jobs figures probably offer more to the optimist than the pessimist, and indicate that the labour market is nowhere near suffering any kind of meltdown. Nonetheless, at the start of 2011 the CIPD cautioned that the official jobs data would be difficult to interpret in the first few months of the year since our own independent survey evidence showed a pick-up in demand for labour toward the end of 2010 followed by a further dip in the first quarter of this year. For the time being therefore the CIPD still expects headline unemployment to reach 2.7 million by the end of 2011 and continue to rise into 2012.

On the theme of caution, the CIPD repeats its call from earlier in the week for commentators to acknowledge the distorting effects of 16-24 year olds in further and higher education on the headline rate and level of youth unemployment. 1 in 8 young people in this age group are unemployed and almost 30% of those classified as unemployed are full-time students. The UK is experiencing a serious youth unemployment problem which requires an appropriate policy response but talk of a lost generation of jobless young people does not aid sensible debate over possible solutions.


comment from Adecco on today's ONS employment figures.

Steven Kirkpatrick, Managing Director, Adecco - the UK's largest recruiter, said:

"Contrary to the latest ONS figures, our branches have reported an uplift in vacancies this month, with demand for both permanent and temporary staff increasing in some sectors including IT and engineering.
However, levels of unemployment are still high, and it is important to remember that we are yet to see the full impact of the public sector cuts. While we expect to see new vacancies in the private sector continue to grow, they are unlikely to keep pace with the public sector redundancies. Despite some promising signs, there is no escaping that we have a tough year ahead."

Dave Way, managing director of financial services recruiter Marks Sattin, said: This is the tip of the iceberg in terms of public sector rationalisation. As budget cuts begin to scythe through the public sector, the appetite from public sector workers for private sector roles will rocket. Thats fine up to a point as private enterprise can pick up some of the slack. But whether it will be able to mop up all those released from public employment is another question.

At the top end, public sector salaries have been excessive for far too long. More than 9,000 senior employees being paid out of the government purse are earning more than the PMs 142,500 a year. Some of them must be worth the money but theres undoubtedly a lot of fat to be trimmed up there before we start to hit muscle that cannot be cut. To pay for those executive excesses, people on more modest incomes will have to feel the pain too. Unfortunately, those who must be let go may have to retrain extensively and potentially accept pay cuts to return to employment. A life spent in the service of the public sector doesnt always resonate with many private sector employers especially in the financial services sector. These are tough times for public sector workers and those who are let go will have to be flexible and open-minded to stay in employment.


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