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ONS unemployment statistics highlight fears of lost generations

ONS unemployment statistics highlight fears of lost generations
This Wednesday (15.6.11) at 9.30am, official Government figures from the Office of National Statistics have revealed that the underlying trend of rising unemployment among the hardest-to-reach families in Britain continues to grow.
The number of people unemployed for over 24 months increased by 39,000 to reach 385,000 adding to earlier fears of a growing aspiration gap highlighted by the Princes Trust report which revealed that more than a quarter from poor homes feel that people like them dont succeed in life.

Although total number of unemployed people fell by 88,000 over the quarter to reach 2.43 million, the quarterly fall in unemployment occurred mainly among people aged 16 to 24. The number of unemployed people in this age group fell by 79,000 over the quarter to reach 895,000

It is important to raise peoples aspirations from an early age through quality training initiatives so that they are empowered with the skills and confidence needed for success. We have a guest available for comment, Liz Field, CEO of Financial Skills Partnership. For more information, contact Paul Dodd at Flame PR on 0203 357 9742 or Chris Netto on 0203 357 9744.

Nigel Meager, Director of the Institute for Employment Studies, commented on the latest figures:The next few months will be critical for the UK labour market. During this period the effects of public spending cuts will start to show up in a major way in the employment figures. Will the much-vaunted private sector recovery begin to generate jobs on a scale necessary to compensate for the cuts? Or are the cuts simply taking too much demand out of the economy too quickly and threatening the already tentative recovery?On the basis of todays figures, it would seem that the jury is still out. At first glance the latest data suggest relatively good news, with private sector jobs growth still outweighing public sector job loss. It needs to be stressed, however, that the bulk of the employment impact of public sector cuts is yet to be felt: these data do not yet include the effect of the cuts taking place during the current financial year starting in April. The public sector figures are also still flattered somewhat by the inclusion of temporary Census jobs.Further, when we look at unemployment, the picture remains unclear, with a big reduction in the Labour Force Survey figure being set against an increase in the more recent claimant count data. Other indicators of labour demand also reveal signs of underlying weakness, with reduced numbers of vacancies, and a surprising fall in the number of hours worked in the economyThe overall picture suggests a fragile, weak recovery in the labour market, which could easily be tipped into reverse, as the public sector job loss continues and intensifies.

Unemployment in three months to April fell by 88,000, employment rose by 80,000

Commenting on the labour market statistics, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:

"These figures are positive, with employment increasing and unemployment falling. There was also a large fall in unemployment amongst young people and a significant increase in private sector employment. However, there are some worrying features. The number of those claiming benefits rose more than expected in May, and the number of people working part-time because t hey could not find a full time job rose to a new record high.

"Overall, these figures confirm that the private sector is willing and able to create jobs, despite the likelihood of more public sector job cuts in the coming months. However, we must not be complacent as we are still expecting total unemployment to increase by 150,000 over the next 12-15 month s. The government must empower the private sector to create jobs by reducing the burden of regulation on businesses, particularly smaller firms.

"The figures also show a further reduction in earnings growth, confirming our view that there is no immediate risk of a wage-price spiral. This should strengthen the hand of those MPC members that want to delay any increase in interest rates. The top priority must be to support and nurture the fragile recovery."


Steven Kirkpatrick, Managing Director, Adecco the UKs largest recruiter, said:

"It is reassuring to see improvements to the jobs market in recent weeks. We have continued to see strong demand for temporary staff, and this is likely to continue throughout the summer. Temporary workers remain vital to many businesses and every business that is dependent on this resource should take the time to fully understand the implications of the new Agency Worker Regulations which will come into force in just over three months. Low confidence amongst employees has meant that many people are still reluctant to change jobs, but temporary workers should be reassured that there are jobs out there despite continued economic difficulties.

ONS Figures Show Unemployment Falling

The unemployment rate for the three months to April 2011 was 7.7 per cent of the economically active population, down 0.3 on the quarter. The total number of unemployed people fell by 88,000 over the quarter to reach 2.43 million. This is the largest quarterly fall in unemployment since the three months to August 2000. The number of people unemployed for up to 12 months fell by 72,000 over the quarter to reach 1.60 million. The number of people unemployed for over 12 months fell by 16,000 to reach 829,000, but the number of people unemployed for over 24 months increased by 39,000 to reach 385,000. The quarterly fall in unemployment occurred mainly among people aged from 16 to 24. The number of unemployed people in this age group fell by 79,000 over the quarter to reach 895,000, the lowest figure since the three months to April 2009. The inactivity rate for those aged from 16 to 64 for the three months to April 2011 was 23.3 per cent, up 0.1 on the quarter. The number of economically inactive people aged from 16 to 64 increased by 39,000 over the quarter to reach 9.37 million. This increase in inactivity was mainly due to an increase of 80,000 in the number of students not active in the labour market to reach 2.29 million. The total number of 16 to 24 year olds in full-time education increased by 61,000 on the quarter to reach 3.08 million. The employment rate for those aged from 16 to 64 for the three months to April 2011 was 70.6 per cent, up 0.1 on the quarter. The number of people in employment aged 16 and over increased by 80,000 on the quarter and by 376,000 on the year to reach 29.24 million. The number of people in employment is 333,000 lower than the pre-recession peak of 29.57 million recorded for the three months to May 2008. The number of employees and self-employed people working part-time because they could not find a full-time job increased by 46,000 on the quarter to reach 1.21 million, the highest figure since comparable records began in 1992. The number of people in employed in the public sector fell by 24,000 over the quarter to reach 6.16 million but the number of people employed in the private sector increased by 104,000 over the quarter to reach 23.08 million. There were 1.49 million people claiming Jobseekers Allowance (JSA) in May 2011, up 19,600 on April. The number of men claiming JSA increased by 11,100 to reach 1.01 million and the number of women claimants increased by 8,500 to reach 483,700, the highest figure since September 1996. The whole economy earnings annual growth rate for total pay (including bonuses) was 1.8 per cent for the three months to April 2011, down from 2.4 per cent for the three months to March. This fall in the growth rate was largely driven by lower growth in bonuses across the private sector. The whole economy earnings annual growth rate for regular pay (excluding bonuses) was 2.0 per cent for the three months to April 2011, down from 2.1 per cent for the three months to March.

Unemployment down this quarter - Grant Thornton's head of resourcing comments

Samantha O'Byrne, Head of Resourcing at Grant Thornton UK LLP, says: "The labour market has seen growth for the second consecutive quarter but the figures may still be masking the reality of the severity of youth unemployment in particular, which is still the biggest threat facing the job market. There is also a high chance overall unemployment will increase further this year before it comes down again.

"It is vital to make sure young people engage with the labour market early to improve these statistics. This could be by introducing them to work as school leavers or through internships, even before they reach graduate level.

"Skills shortage is constantly being brought up as a major issue and many argue that we are seeing a speedy shift towards higher-skilled jobs, while the demand for people without qualifications is falling, but it is important to point out that 'skills' do not have to equal a university degree.

"It is important to take all skills and individuality on board and you don't necessarily have to go down the conventional degree route to be successful in working life. Many of our trainees on the school leaver programme would argue that they are in fact better off than their friends who have decided to take a degree as they are a few years further down the line and have more experience, higher wages, and no debt.

"This month, if they haven't already secured jobs, it is crunch-time for many students on deciding which route they want to take. The increased fees and the complexity of how they should be repaid mean many need to think long and hard about their decision, particularly weighing up the cost of study vs the potential experience and wages they can get by going straight to work.

"School leaver programmes can really open up the opportunity for social mobility and young people should be encouraged and be made aware of the opportunities available to undertake internships and other routes into work outside of the conventional norm," O'Byrne concluded.
Tom Lovell, group managing director of specialist recruitment consultancy Reed, comments on the labour market statistics for May 2011 published today by The Office for National Statistics:
Through May, we at Reed have seen an increase in job opportunities across the board compared to April. The series of holidays in April reduced the flow of jobs but now the cluster of bank holidays is out of the way we expect to see an increase in job opportunities as organisations look to fill any gaps before the summer holiday season gets into full swing.
May saw an upturn in the permanent jobs market, with a 23% increase in permanent jobs taken in May compared to April this year. We saw a similar effect in the temporary jobs market, with a 10% increase in the number of temporary workers placed in May 2011 compared to April. Interviews arranged were also up by 13%.
We have also seen some sectors perform especially well during May, with accounting, finance and education being particular standouts. They all saw increases in temporary jobs, permanent jobs and interviews attended when compared to April this year.
The Reed Job Index also found that overall employer demand is up 18% year on year. Although the majority of growth has come from the private sector, its interesting to note that public sector employer demand is at its highest since July last year.
Dave Way, managing director of accountancy and finance recruiter Marks Sattin said: The boost to employment for people aged between 35 and 49 is certainly visible in the City. Firms are hiring into their middle tiers and accountancy and finance workers are optimistic their salary increase of 8% last year will be bettered in 2011. In terms of salaries, the accountancy and finance profession continues to outperform the rest of the economy as employers who had to significantly reduce headcount during the recession are competing for the best people as the recovery gets underway.
REC reaction to latest jobless figures - see below.
Drop in jobless figures good news, says REC, but confirms two speed market is now in full swing
Figures out today have shown another significant fall in the numbers of people out of work. In the three months to April, the total fell 88,000 to 2.43 million, the largest quarterly fall in unemployment for more than ten years, according to the Office for National Statistics.
The most marked fall has been in the number of young people out of work which has dropped 79,000 to 895,000, the lowest rate since April 2009.
Commenting on the figures, Kevin Green, the RECs Chief Executive, said: The reduction in the number of unemployed people is to be welcomed especially among the young. However, this could be the lull before the storm as in the next three months tens of thousands will be leaving school, college or university, having completed their GCSEs, A-levels and degrees.
The new figures show that those working in the public sector fell by 24,000 to 6.16 million during the quarter while those employed in the private sector increased by 104,000 to 23.08 million during the same quarter.
Kevin Green added: While the May Report on Jobs marked a slowing in the rate of growth, recruitment professionals continue to report that hiring activity is still strong in many sectors of the jobs market. Coupled with that, employer confidence is at a 12 month high as is consumer confidence so the jobs market outlook in the next few months is looking more positive than expected considering the UKs anaemic economic growth.
The figures also clearly demonstrate that the two speed jobs market we predicted is now in full swing. We remain confident that the private sector can absorb the fall-out from public sector cuts in the medium term.
The CBI today commented on the latest unemployment figures, showing a fall to 2.43 million in the last three months.
Commenting on todays data, Neil Carberry, CBI Director for Employment, said:
"It is good news that unemployment figures have fallen, with the private sector creating jobs. We hope this will continue in the coming months, but we still have a serious problem with long-term unemployment and inactivity. We need to tackle the structural causes of unemployment to get the UK working."
Earlier this week, the CBI launched a new project to explore ways of getting all the UK working by tackling long-term unemployment and inactivity. Further details can be found at:


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