Page last updated at 15:55 GMT, Wednesday, 20 January 2010

Unemployment falls to 2.46m

Work and Pensions Secretary Yvette Cooper warns unemployment may yet rise

The number of people unemployed in the UK has fallen unexpectedly for the first time in 18 months.

Total unemployment stood at 2.46 million for the three months to November, down 7,000 on the figure for the previous three months.

It ends the continuous rise in unemployment that began in the summer of 2008 after the recession began.

Ministers welcomed the figures but warned that joblessness could rise again in the coming months.

The rate of unemployment now stands at 7.8%, down from the 7.9% reported last month, the Office for National Statistics (ONS) said.

Meanwhile, the number of people claiming Jobseeker's Allowance fell to 1.61 million in December.

That is a fall of 15,200 over the month - significantly greater than the 2,500 anticipated by analysts.

The number of 16-24-year-olds out of work also fell over the three-month period between September and November, down from 943,000 to 927,000.

Part-time impact

But the fall in unemployment was fuelled partly by an increase in people taking part-time work.

The number of people in part-time employment increased by 99,000 over the quarter to reach a record high of 7.71 million.

UK jobless map

More than a million of these were working part-time because they could not find a full-time job - the highest figure since records began in 1992, according to the ONS.

The number of people neither employed nor looking for work - not included in unemployment figures - was up to 21.2% of the population. That was the highest rate since August 2007.

George Buckley, chief UK economist at Deutsche Bank, said workers were more willing in this recession to accept low pay and shorter hours in return for keeping their jobs, helping to stem job losses.

"These figures are encouraging," he said.

"In previous recessions it took years for unemployment to stop rising, but that hasn't happened this time."

Mr Buckley admitted previous predictions of the unemployment rate reaching 10% now looked unrealistic.

'Still tough'

The figures, which came as a surprise to many analysts, were welcomed by Work and Pensions Secretary Yvette Cooper.

"The jobs market is still tough for a lot of people, but the drop in unemployment and youth unemployment is very welcome," she said.

Lib Dem work and pensions spokesman Steve Webb: "Much more needs to be done"

"It means 450,000 fewer people are out of work than everyone expected last spring."

But she added that unemployment would remain "difficult" for some months ahead.

Shadow work and pensions secretary Theresa May said there was still cause for conern.

"Economic inactivity has hit a record high and there are 2.3 million people out there, out of work and who want a job, but aren't included in the unemployment figures," she said.

Economists warn that a continued recovery in the labour market would still depend on the recovery in the wider economy, encouraging companies to hire more staff.

There were some signs of increased demand for workers in the figures. The number of vacancies being advertised rose by 16,000 compared with the previous three-month period, though it is still down significantly on a year ago.

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