Unemployment fell by 45,000 over the three months to March, according to the latest labour market statistics. Youth unemployment went down by 18,000 while there was a second consecutive fall in the number of people claiming Jobseeker’s Allowance – after 16 consecutive monthly rises.
However, the headline drop is said to reflect an increase in part-time working and some areas, such as North East and North West, continue to experience rising unemployment. There are said to be 1.4m people working part-time but want a full-time job, more than at any time since records began in 1992.
Tony Dolphin, chief economist at the Institute of Public Policy Research (IPPR) think tank, said the figures reflected a labour market that was improving, albeit at a very modest pace.
“The fall in unemployment in the first three months of this year, compared to the last three months of 2011, is very welcome news. It suggests the current recession in the UK is likely to be a very mild one,” he said.
“However, there is still evidence of weakness in the labour market. The 105,000 increase in employment in the latest quarter was more than accounted for by part-time workers. The number in full-time employment fell by 13,000. There are now 1,418,000 people working part-time who say that they want a full-time job.”
Dolphin added: “Long-term unemployment increased again – to 887,000 – and is now at its highest level since 1996. More than a quarter of a million (265,000) young people (aged under 25) have been without a job for more than 12 months.”
Ian Brinkley, director at The Work Foundation, said that the latest figures were surprising but very welcome. He added that demands for further deregulation of the labour market to stimulate job generation had been shown to be unjustified, with private sector employers clearly feeling confident enough to hire in large numbers over the three months to March.
But he conceded that the overall numbers disguised some underlying weaknesses.
“The economy is still shedding full-time jobs, with all the increase accounted for by part-time work,” he said. “The latest figures confirm that underemployment is emerging as a significant problem in the UK labour market, with the number of people in part-time work because they could not find a full-time job up by 33 per cent over the past two years.”
Graeme Leach, chief economist at the Institute of Directors, said the figures raised half a cheer for the economy.
“Both headline unemployment measures are down, which is obviously good news,” he said, “but there’s bad news in the average earnings figures. Average earnings growth including bonuses has collapsed from 1.3 per cent to just 0.1 per cent. Excluding bonuses, average earnings growth stands at 2 per cent, which is way behind inflation. This means the real squeeze in household incomes continues to act as a dragging anchor on consumption and high street spending.”
Liam Byrne, Labour’s shadow work and pensions secretary, said that while any increase in employment was welcome, it was “really worrying” to see the number of long-term unemployed “surge” towards 1m.
“Long term youth unemployment is twice the level of last year and the overall claimant count is 100,000 higher than last year,” he said. “More worrying for the outlook is that the number of redundancies has surged to 50,000 more than last year and the number of vacancies is down by over 10,000. People in Britain are fighting through and this government is failing to lift a finger to help.”
The latest unemployment figures by region are:
North East: 148,000 (+ 6,000) 11.5 per cent
London: 426,000 (-1,000) 10.1 per cent
North West: 329,000 (+ 11,000) 9.6 per cent
Yorkshire / Humber: 241,000 (- 24,000) 9 per cent
Wales: 132,000 (- 1,000) 9 per cent
West Midlands: 228,000 (- 19,000) 8.5 per cent
Scotland: 221,000 (- 10,000) 8.2 per cent
East Midlands: 182,000 (- 6,000) 7.8 per cent
East: 207,000 (- 6,000) 6.7 per cent
N Ireland: 57,000 (- 5,000) 6.7 per cent
South West: 175,000 (+ 10,000) 6.5 per cent
South East: 279,000 (+ 1,000) 6.2 per cent
