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Jobs Creation Helps Employment Rise

Jobs Creation Helps Employment Rise

The Minister for Employment has welcomed a further increase in the number of people in work and a fall in unemployment as he met staff starting work after being recruited through the Government’s Work Programme.

The new figures, published by the Office for National Statistics, show a rise in employment compared to the previous quarter, up 181,000 to 29.35m. There has been a significant rise in people in full time employment, up 133,000 on the quarter.

Unemployment has fallen again down by 65,000 to 2.58 million (ILO measure).

The figures show more job opportunities are available, with the number of vacancies at 471,000, up 10,000 on the quarter and 12,000 on a year earlier.

The claimant count continues to be affected by changes in government policy. The number of people on Jobseeker’s Allowance rose 6,100 between May and June, but both reform of eligibility for lone parents benefits and the continued reassessment of people on Incapacity Benefits are likely to have added to the JSA caseload over this period.

The number of unemployed 16 to 24 year olds has fallen 10,000 on the quarter. Of those, the number of young people out of education and seeking work is now 724,000 and the number of full-time students looking for a job is 299,000.

The unemployment rate in the UK at 8.1 per cent remains lower than the EU (10.3), Eurozone (11.1) and our neighbours Ireland (14.6) and France (10.1).

The total number of people on the main out of work benefits is currently around 90,000 lower than in May 2010.

Minister for Employment Chris Grayling welcomed the figures as he visited a new TNT postal delivery centre in central London where 70 staff were starting work today. Many of them are aged 18 to 24 and recruited from the Work Programme, the Government’s payment-by-results scheme to help those at risk of long-term unemployment get back into work.

Mr Grayling said:

“This is an encouraging set of figures in what is still an incredibly difficult economic climate. Not only is unemployment falling but in overall terms there are now almost 100,000 less people on benefits since the 2010 election. We still have a long way to go but this is a step in the right direction.”

TNT recruits who the Minister was due to meet today include:

Elizabeth Arinola, a 23 year old criminology graduate from Finsbury Park, she finished her voluntary job in March and out of work since. She joined Ingeus through the Work Programme and is delighted to be joining TNT Post as it is a new company and she sees the potential for career growth.

Lee Davis, a 22 year old from Camden, had been unemployed since he worked as a gas meter reader. After a year and a half out of work and taking part in the Work Programme, he jumped at the chance work for TNT Post having previously worked for Royal Mail one Christmas as a temporary postman.

Background to labour market statistics: July 2012

This month's Labour Force Survey covers March to May 2012. The claimant count is for June 2012 and the vacancy count for April to June 2012.

The number of people in work rose this quarter

&middot 29.35 million people were in work in March to May 2012.

&middot the employment level rose 181 thousand on the previous quarter and 75 thousand on the year.

&middot the employment rate is 70.7%, up 0.3 points on the quarter but unchanged on the year.

ILO unemployment fell this quarter

&middot 2.58 million people were ILO unemployed in the March to May 2012 quarter, down by 65 thousand on the December 2011 to February 2012 period but up 132 thousand on the same quarter last year.

&middot the ILO unemployment rate is 8.1%, down 0.2 percentage points on the quarter but up 0.4 percentage points on the year.

The level of economic inactivity is down on the quarter and on the year

&middot the economic inactivity level is 9.21 million, down 61 thousand on the quarter and 121 thousand on the year.

&middot the economic inactivity rate is 22.9%, down 0.2 points on the quarter and 0.3 points on the year.

&middot excluding students, inactivity as a share of the 16-64 population is 17.4%, unchanged on the quarter but down 0.2 points on the year.

The number of people on JSA rose this month, but the number claiming one of the other main out-of-work benefits is improving

&middot claimant unemployment was 1,604 thousand in June 2012, up 6.1 thousand on the level in May 2012 and up 78.6 thousand on the year.

&middot the claimant unemployment rate, at 4.9%, is unchanged on the month but up 0.2 percentage points on the year.

&middot the figures continue to be affected by welfare reform, including reforms to eligibility for lone parent benefits and re-assessment of existing claims for incapacity benefits. Both are likely to have added to the JSA caseload between May and June.

&middot in the year to November 2011, the number claiming incapacity benefits fell 10,800 to 2.58 million. The most recent provisional figure for May 2012 suggests the caseload has since fallen further to 2.52 million.

&middot in the year to November 2011, the number of lone parents on income support fell 66,700 to 581,600. The provisional figure for May 2012 is 575,000, suggesting the level is close to flat.

The number of redundancies fell and unfilled vacancies rose on the quarter

&middot There were 147 thousand redundancies in March to May 2012, down 27 thousand on the previous quarter but up 4 thousand on the year.

&middot ONS’s vacancy survey estimates an average of 471 thousand unfilled vacancies in the three months to June 2012, up 10 thousand on the quarter and 12 thousand on the year.

Total weekly pay in May 2012 was up by 1.5% over the year

&middot growth in regular weekly pay, excluding bonuses, was up 1.8% on the year.

Comments:

Mark Cahill, MD at ManpowerGroup UK, comments: “The UK jobs market is showing remarkable signs of resilience in an uncertain economic environment. But that is only part of the story. Firstly, we see a talent mismatch and shortage of skills in professions, ranging from engineers to IT staff. Secondly, the UK economy remains blighted by youth unemployment – one of the biggest social and economic problems that must be tackled if we are ever to achieve a sustainable and prosperous future – in an increasingly competitive global market. Whichever view we take, the UK is facing difficult labour market issues and it is the shares responsibility of business, government and individuals to take concerted and effective action to prevent a crisis from developing.”

Commenting on the latest Labour Market Statistics released today by the Office for National Statistics, the Recruitment and Employment Confederation’s Director of Policy and Professional Services Tom Hadley says: “Today’s figures are good news and are further evidence that it is possible for the private sector to compensate for public sector job losses. However, we still need to be cautious. Tens of thousands of university, school and college leavers will be entering the job market over the summer and our latest data from recruiters shows hiring activity is slowing. The UK is making gradual progress out of recession and is likely to experience a zigzag pattern with some good months followed by weaker ones – rather than sustained periods of uninterrupted jobs growth.

“The increase in long-term unemployment is a real concern which must be addressed immediately. Prevention is the best cure and now is the time to open a proper debate about providing earlier support and guidance for job-seekers, rather than waiting for 12 months. A cost-effective option for government would be to tap into the expertise that already exists within recruitment agencies all around the UK who could be drafted in to provide targeted support and advice.”

The CBI today commented on the latest official labour market data, showing that unemployment fell by 65,000 and employment rose by 181,000 in the three months to May. The number of people claiming Jobseekers Allowance (JSA) rose by 6,100.

Neil Carberry, CBI Director for Employment and Skills, said: “Despite the challenging economic times, the British labour market is showing some resilience, with jobs being created and fewer people unemployed. The persistent rise in the number of people claiming JSA remains troubling, however.

“The rising number of JSA claimants, and the fact that we have 441,000 people who’ve been unemployed for over two years, emphasises how important the Government’s Work Programme is. We need everyone to get behind the vital Work Programme initiative, to ensure it fulfils its potential for jobseekers, employers, and taxpayers.”

Emilie Bennetts, Associate, Charles Russell LLP: “This month’s figures, which show a further decrease in UK unemployment, will no doubt be heartily welcomed by the Government. Yet these statistics continue to mask a nine-year low in public sector employment and widespread youth unemployment, all set against the backdrop of ongoing turbulence in the eurozone. While any increase in employment should certainly be celebrated, prudent analysts will approach these figures with caution, as the road to labour market stability remains long and rocky.”

Commenting on the ONS Labour Market statistics released today, Gerwyn Davies, Labour Market Adviser at the Chartered Institute of Personnel and Development (CIPD), comments: “The labour market continues to defy the laws of economic gravity, with employment up and unemployment down, despite stalling growth forecasts and stuttering confidence. The downside is that, for now, we have a seemingly entrenched pattern of falling productivity and subdued pay affecting the competitiveness of employers and the living standards of employees. The employment picture is encouraging, but the missing ingredient is economic growth – without which the risk remains that another shock of any kind may send our surprisingly resilient labour market into reverse.

“The most positive aspect about today’s figures is that, while part-time employment continues to rise, the bulk of the growth in employment is full-time. The most worrying aspect of today’s figures is the rise in long-term unemployment. This puts the spotlight on the Government’s Work Programme, which is tasked with getting the most disadvantaged in the labour market into sustainable employment.”

Commenting on the labour market figures published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: “The latest employment figures are encouraging following recent pessimism about the UK economy. But some causes for concern still remain. The number claiming jobseeker’s allowance is up slightly, the increase in the number of people unemployed for more than two years is worrying and youth unemployment remains high. Nevertheless, it is clear that the private sector is creating jobs while public sector employment is shrinking.

“These figures highlight the puzzling contrast between continued growth in jobs and the decline in GDP, which is being reported by the ONS. Although economic growth remains weak, it is difficult to believe that the economy has been in recession since the final quarter of 2011. Although many commentators expect the ONS to announce a third consecutive decline in GDP next week, it is important to sustain confidence.

“But many uncertainties lie ahead. Continued difficulties in the eurozone create challenges for our exporters at a time when austerity measures are putting downward pressure on domestic demand. Unemployment is likely to increase further over the next twelve to eighteen months, but the peak will probably be lower than the 2.9m figure predicted in our latest forecast. These positive job figures must be supported by important policy measures, such as more deregulation and creating a state-backed business bank to help businesses drive recovery.”

Nigel Meager, Director of the Institute for Employment Studies comments on today’s jobs figures from the Office of National Statistics: “While we should never place too much weight on a single month’s data, today’s figures, alongside those of the last 2-3 months, suggest that the UK labour market may now be stirring back into life, with nearly all the key indicators recording positive changes. While there will be some short-term labour market impact from the Olympic games, the data released today refer to the period March-May, and any real effect from the Olympics will show up in later months' data:

Employment is up by 181,000 in the quarter to May 2012, and importantly three quarters of this was among full-timers (until now, much of the growth in employment has been in part-time work)

The headline unemployment figure is down by 65,000 on the quarter to May 2012. Within this total, there was also a small fall in youth unemployment, although the more recent figure for those claiming Jobseekers’ Allowance again rose slightly by six thousand during June.

The month also saw small positive changes in the indicators of demand from employers, with redundancies down and job vacancies up.“Taken together, these are small moves in the right direction. It is important to remember, however, that there is still a long way to go. The overall macro-economy remains in the doldrums with GDP stuck at four percentage points behind its pre-recession level, in the longest and most sustained downturn in living memory. The labour market has proved more resilient that might have been expected in such a slump, but the big surge in unemployment (from 1.6 to 2.4 million) all occurred at the beginning of the downturn (between spring 2008 and 2009). For over three years now, unemployment has stuck stubbornly in the 2.4-2.6m million range, with small month-to-month fluctuations. And despite the good news of the last few months, that’s where it remains, at just under 2.6m. With the current dismal economic growth forecasts alongside more austerity cuts to come, it will take years, not months, to get unemployment back to pre-crisis levels.”

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