Page last updated at 14:44 GMT, Wednesday, 17 February 2010

UK unemployment falls for second month in a row

Job centre
The number of 16 to 24-year-olds out of work fell

The number of people unemployed in the UK has fallen slightly, figures show.

Total unemployment stood at 2.46 million for the three months to December, down 3,000 on the figure for the previous three months.

But long-term unemployment, covering those out of work for more than a year, rose by 37,000 to 663,000, the highest figure since 1997.

And the number of people claiming Jobseeker's Allowance climbed by 23,500 to 1.64 million in January.

'Tough times'

That was the largest increase since July last year - with analysts having expected the number of claimants to fall by about 10,000.

The rate of unemployment was unchanged at 7.8%, the Office for National Statistics (ONS) said.

Stephanie Flanders
By Stephanie Flanders, BBC Economics Editor

The rise in the claimant count in January is disappointing but not a shock - the big surprise was the previous two months of declines, while the economy was still technically in recession.

With the recovery still so uncertain, the best bet is for further rises in the jobless total in the next few months. But on the basis of these figures, we can still expect unemployment to peak earlier - and somewhat lower - than many would have expected a year ago.

Once again, rising part-time employment over the last three months of 2009 has partly offset a 37,000 fall in the number employed full-time, but we can draw some comfort from the fact that this decline in full-time employment is the smallest since the recession began.

This is the second consecutive month that the wider measure of unemployment has fallen.

But the rise in the claimant count could point to further increases ahead, said John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development.

"That indicates that the labour market was quite weak at the turn of the year and it might presage further bad news for the reminder of the first half of the year," he said.

Rising levels of people who were underemployed - working part-time when they would prefer to work full-time - gave "a much richer account of the degree to which this recession has impacted on the workforce", Mr Philpott added.

"With a weak economic recovery set to result in further job losses in the coming months, it is highly likely that the unemployment situation will get worse before it starts to get significantly better."

While unemployment for the UK as a whole fell by 3,000, there were some big national and regional differences.

The South East experienced the biggest rise in unemployment during the quarter, up by 12,000, and the West Midlands recorded the biggest fall, down 16,000.

In Scotland, the number of people out of work increased by 10,000, while in Northern Ireland there was a drop of 8,000.

Temporary workers

Meanwhile, the number of workers in temporary jobs climbed to 1.434 million, up from 1.427 million in the previous three months.

The report also said 34.6% of people working on a temporary basis had said they had failed to find permanent work. This figure was up from 32.8%.


South East: Up 12,000 to 276,000
Yorks/Humber: Up 11,000 to 240,000
Scotland: Up 10,000 to 206,000
London: Up 3,000 to 373,000
East: Up 1,000 to 194,000
North East: No change 117,000
Wales: Down 2,000 to 122,000
South West: Down 3,000 to 172,000
North West: Down 4,000 to 289,000
East Midlands: Down 5,000 to 167,000
Northern Ireland: Down 8,000 to 49,000
West Midlands: Down 16,000 to 252,000
Source: ONS

The number of men who said they had been forced to take temporary work rose by 9.2% from the previous quarter.

And there were 37,000 more people (3.7%) who said they had taken a part-time job because the could not find full-time employment.

The ONS figures showed that the number of 16 to 24-year-olds out of work fell over the three-month period between October and December, down to 923,000 from 936,000 in the previous three months.

The percentage of people neither employed nor looking for work, and who are not counted as unemployed by the ONS, rose to 21.3%.

This group includes students, long-term sick or disabled people, the temporarily sick or injured, and people who have retired early or are looking after their family and home.

'Dreaded landmark'

The public sector is expected to suffer big cuts later this year as whichever party forms the next government will need to begin the process of reducing the UK's £178bn budget deficit.

This could spark a second round of rising unemployment.

Work and Pensions Secretary Yvette Cooper said that unemployment had been much lower than expected last year, partly because employees had been prepared to take pay cuts to stay in work.

"We know things are going to be tough for a while and we expect further increases in unemployment before the summer."

"That's why it's so important to increase help for people now, not cut it back."

Shadow work and pensions secretary Theresa May said she was concerned by some underlying trends.

"We see the number of people who are long-term unemployed has gone up.

Yvette Cooper: We have to keep helping people back into work

"I think this is a worrying picture and shows that we must make sure we do not damage recovery and that means government must have a credible plan to deal with the deficit."

Liberal Democrat work and pensions spokesman Steve Webb said that cutting spending now was not the right approach.

"Record numbers of people out of work for more than a year is the government's dreaded landmark," he said.

"These people will be the hardest to help back into work when the economy recovers and risk never coming off benefits."

The ONS data indicated that wage growth remained subdued - rising by an average of 0.8% in the three months to December compared with a year ago.

Excluding bonuses, average weekly earnings rose by 1.2% for a third month running.

This rate is the lowest since the data began being collected in 2001.

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