Unemployment falls for second month in a row

• ILO measure shows drop in jobless numbers • Youth unemployment declined • But claimant count rose by 12,400 in April • Average pay up 2.3% Unemployment fell by 36,000 in the first three months of the year despite the economy’s lacklustre rate of growth, official figures show, in a rare piece of good news for George Osborne. The Office for National Statistics said the number of people out of work on the government’s preferred International Labour Organisation measure fell to 2.46m, taking the unemployment rate to 7.7%, from 7.8% in the three months to February. It marks the second successive month of declining joblessness, helping to ease the pain for households facing rising inflation and heavy debts. Youth unemployment – a potential political flashpoint for the coalition – also declined, to 935,000, though that still means one-in-five 16 to 24-year-olds are out of work. There was fresh evidence of the labour market’s continued vulnerability, however, with a 12,400 increase in the more timely claimant count measure for April, with more than three quarters of the rise accounted for by women, who tend to be disproportionately hit by cuts in public sector jobs. The number of women claiming out-of-work benefits, at 474,000, is now at its highest level since 1996. Howard Archer, of consultancy IHS Global Insight, said the jump in the claimant count in March could signal further weakness in the coming months. He pointed out that while 118,000 new jobs were created in the three months to March, most of those were in January, with just 7,000 new hires last month. “We suspect that likely below-trend growth will mean that the private sector will be unable to fully compensate for the increasing job losses in the public sector that will result from the fiscal squeeze that is now really kicking in. Indeed, we believe that private sector companies will become increasingly careful in their employment plans in the face of a struggling economy and elevated input costs.” There is still little evidence of inflation-busting wage rises, according to the ONS report – average pay rose at an annual rate of 2.3% including bonuses, or a more modest 2.1% when bonuses are excluded. Chris Williamson, chief economist at Markit, said that was good news for the Bank of England’s monetary policy committee as it battles inflation; but bad news for anyone trying to sell goods and services to hard-pressed British consumers. “The advantage of low pay growth is that it will help keep the current high rate of inflation from becoming entrenched. The downside is that, with inflation at 4.5%, this means that real pay is falling at a rate of 2.3% a year, which is going to further stifle consumer spending. This weakness of the household sector may well be a feature of the economy for some time to come,” he said. Unemployment and employment statistics Economics Unemployment Job losses Heather Stewart guardian.co.uk

Posted by on May 18, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.