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Jobs boost welcomed as unemployment falls for fifth month ONS Numbers and Opinions

Jobs boost welcomed as unemployment falls for fifth month – ONS Numbers and Opinions

Work and Pensions Secretary Iain Duncan Smith today welcomed a fifth consecutive fall in unemployment as official figures showed an extra 201,000 people in employment compared to the previous quarter.

Figures published by the Office for National Statistics showed a fall in unemployment of 46,000 between April and June compared to the previous three months. There are now 2.56million people unemployed – the lowest for almost a year. There was little change in the number of people unemployed for 12 months or longer.

There are also an extra 201,000 people in work compared to the previous quarter, 130,000 of whom are in full-time jobs. A modest increase of 16,000 in the number of temporary workers suggests the increase in number of people working is not simply down to short-term Olympic jobs.

Since April 2010, 634,000 extra people are in employment, over half a million of these outside London.

Today’s figures also show the number of people claiming Jobseekers Allowance (JSA) fell by 5,900 in July. This is particularly welcome news because policy changes including the reassessment of incapacity benefit claimants and changes to rules on lone parents claiming income support mean more non-working people are transferring to JSA from other benefits. The total number of people claiming the main out of work benefits is now more than 100,000 lower than in May 2010.

The number of 16-24 year olds in work rose by 40,000 compared to the previous quarter, while there was a 4,000 fall in the number of people in this age who are unemployed. Excluding full-time students, there are 713,000 16-24 year olds who are unemployed.

The UK unemployment rate of 8% is considerably lower than the Eurozone average of 11.2%, European Union average of 10.4% and lower than the United States of America (8.3%), France (10.1%) and Spain (24.8%).

Mr Duncan Smith said:

“These are positive and encouraging figures demonstrating the strength of our private sector - notwithstanding the difficult economic times it is still creating jobs, the vast majority of which are full time. Unemployment is falling and the claimant count is down."

Today’s statistics also reveal the number of UK nationals in work hit 26.83m between April and June – up 246,000 on the year before, compared to an increase of 15,000 in the number of non-UK nationals in work.

Background to labour market statistics: Aug 2012

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

The number of people in work rose this quarter

? 29.48 million people were in work in April to June 2012.

? the employment level rose 201 thousand on the previous quarter and 251 thousand on the year.

? the employment rate is 71.0%, up 0.4 points on the quarter and up 0.4 points on the year.

ILO unemployment fell this quarter

? 2.56 million people were ILO unemployed in the April to June 2012 quarter, down by 46 thousand on the January 2012 to March 2012 period but up 51 thousand on the same quarter last year.

? the ILO unemployment rate is 8.0 %, down 0.2 percentage points on the quarter but up 0.1 percentage points on the year.

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

? the economic inactivity level is 9.10 million, down 117 thousand on the quarter and 214 thousand on the year.

? the economic inactivity rate is 22.6%, down 0.3 points on the quarter and 0.6 points on the year.

? excluding students, inactivity as a share of the 16-64 population is 17.2%, down 0.1 points on the quarter and down 0.5 points on the year.

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

? Claimant unemployment was 1,593 thousand in July 2012, down 5.9 thousand on the level in June 2012 and up 35.6 thousand on the year.

? the claimant unemployment rate, at 4.9%, is unchanged on the month but up 0.1 percentage points on the year.

? 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 June and July.

? in the year to February 2012, the number claiming incapacity benefits fell 21,000 to 2.56 million. The most recent provisional figure for June 2012 suggests the caseload has since fallen further to 2.51 million.

? in the year to February 2012, the number of lone parents on income support fell 30,000 to 584,000. The provisional figure for June 2012 is 565,000, suggesting that the level is trending downwards.

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

? There were 150 thousand redundancies in April to June 2012, down 21 thousand on the previous quarter and down 4 thousand on the year.

? ONS’s vacancy survey estimates an average of 472 thousand unfilled vacancies in the three months to July 2012, up 10 thousand on the quarter and 16 thousand on the year.

Total weekly pay in June 2012 was up by 1.6% over the year

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


UK labour market continues to defy gravity - REC

Commenting on the latest Labour Market Statistics released today by the Office of National Statistics, the chief executive of the Recruitment and Employment Confederation, Kevin Green, says:

“The UK labour market continues to defy gravity as the private sector carries on creating jobs. This month’s increase in employment means we are only 96,000 off the pre-recession peak for people in work. The continued resilience of our jobs market is a testament to the benefit of this country having the most flexible labour market in Europe.

“However, this could be the lull before the storm. With continuing uncertainty from the eurozone and with thousands of new graduates and school leavers joining the labour market over the summer, it’s difficult to see how this upward trend can be sustained. Our data suggests that we’re likely to experience a zigzag recovery, with jobs figures getting worse before they get better again.

“Long term unemployment remains a real concern, especially among young people who face fierce competition for jobs. Being unemployed for more than six months can have real consequences for employability and prevention is the best cure. We really need the government to revisit the support it provides young people and make sure it kicks in earlier than under current schemes.”

Continued growth in employment masks some fault lines, warns CIPD

In response to the latest ONS labour market statistics released today, Gerwyn Davies, the Chartered Institute of Personnel and Development (CIPD)'s Labour Market Adviser, comments: “In a continuation of recent trends, today’s official ONS employment figures appear to show yet another strong labour market performance. However, a number of factors suggest that fault lines are emerging. For example, redundancy activity has picked up for the first time this year and there are record numbers of self employed and people working part time because they cannot find a full time job. There is also a continued increase in the number of people on government funded employment and training programmes.

“In addition, today's figures don’t reflect the lengths to which a significant number of employers are going to in order to hold on to skilled staff despite low levels of demand as the CIPD reported in its quarterly Labour Market Outlook earlier this week. The continued fall in productivity and increase in unit labour costs will put more pressure on employers.”


The CBI today commented on the latest official labour market data, showing that employment rose by 201,000 in the three months to June, while unemployment fell by 46,000. The number of people claiming Jobseekers Allowance fell by 5,900.

Neil Carberry, CBI Director for Employment and Skills, said:

“This latest labour market data continues the trend of robust performance, given the recent GDP figures. Alongside a rise in overall employment, it’s particularly pleasing to see more people are finding full-time jobs.

“The overall high level of unemployment, especially among young people leaving education, remains a significant challenge. We also need to ensure that the private sector can create jobs across the UK, as the numbers point to a wide variation in regional performance.

“These need to be areas of particular focus for the Government in the autumn.”

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

“The latest job market figures are encouraging, and act as a welcome contrast to recent pessimism about the UK economy. Employment is up, unemployment is down, and the rate of inactivity is at its lowest since 1991.

“But there are still areas of concern. Youth unemployment is unacceptably high, and too many people are still being forced to work part-time as they cannot find a full-time job. While unemployment is likely to increase over the next 12-18 months, the peak may now be lower than the 2.9m figure we predicted in our last forecast.

“Overall, these figures show positive trends in the UK labour market and are difficult to reconcile with other ONS figures, which show three consecutive GDP declines since the end of 2011. If both sets of figures are correct, they imply large declines in productivity, which seems implausible. It is my belief that this could lead to revisions to the GDP statistics in due course.

“Regardless, it is clear is that growth in the UK economy is still too weak. Problems in the eurozone and tough austerity measures will continue to exert downward pressures on domestic demand. The government must build on these positive job figures by considering policies that help businesses deliver growth. This would include more deregulation, an increase in infrastructure spending, and crucially, the creation of a state-backed business bank.”

Jim Hillage, Director of Research at the Institute for Employment Studiescommented on today’s jobs figures from the Office of National Statistics:
“The Olympics appear to have cast a golden glow on the labour market, but it is not clear whether this will flow through the economy as a whole.
With 200,000 more people in work than a year ago, UK employment levels are returning to pre-recession levels and the labour market continues to outshine the rest of the economy. We have now had a steady few months of positive news on the jobs front, which runs counter to the negative stories on the economy as a whole.
This month:
- employment is up by 201,000 in the quarter to June 2012. Most of the increase is in full-time permanent jobs, although part-time numbers are up 70,000 and the number of part-timers seeking full-time work is at record highs
- the headline unemployment figure is down by 46,000 on the quarter to June 2012 and youth unemployment also fell slightly.
- There were also small positive changes in the indicators of demand from employers, with redundancies down and job vacancies up.
The impact of the Olympic halo can be seen by the fact that nearly half of the increase in employment has been in London and in the retail, transport and hospitality sectors. London accounts for nearly all the fall in unemployment.
While this is undoubtedly good news, the latest labour markets statistics do raise questions about why they seem so out of kilter with other recent economic data. Some indications as to why can be seen in the latest statistics:
- Wages are still rising well below prices, so real incomes are falling
- Productivity is also falling, particularly in the service sector.
- So while more people are employed they are producing less per head and for less money.
It is therefore not clear whether these data herald better economic news to come and whether the Olympics can offer a lasting economic legacy.”


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