Unemployment rises sharply, official figures show

The government has repeatedly pointed to job creation by the private sector as reassuring news in the face of the slowdown David Cameron’s hopes that rising job prospects would help to draw a line under the social unrest on Britain’s streets have been dashed by the latest official figures, which reveal a sharp increase in unemployment. The government has repeatedly pointed to job creation by the private sector as reassuring news in the face of the slowdown in economic growth over the past nine months. But the Office for National Statistics revealed that unemployment jumped by 38,000 to 2.49 million in the three months to June, on the government’s preferred measure which includes all those out of work and actively looking for a job. The increase would cancel out the 30,000 jobs George Osborne hopes to create with his new enterprise zones, 11 more of which have been were announced. The unemployment rate rose to 7.9%, from 7.8% in the previous quarter. On the more timely claimant count measure, unemployment was up by 37,100 on a month earlier – the biggest increase since February 2009, when the economy was deep in recession. The figures showed that youth unemployment has risen again, after dropping in recent months, and there was fresh evidence that high unemployment could have been a contributing factor to last week’s wave of rioting. Analysis by the TUC showed that several of the hotspots were among the 10 areas of the country where the largest number of claimants are chasing each job vacancy. Employment minister Chris Grayling conceded that the news was disappointing. “We always said that the road to recovery would be choppy. Clearly this has been a difficult few months with a range of one-off factors and a slowdown in the world economy having an impact on the UK. This is why we are focused on taking steps to increase growth, support the economy and encourage businesses to invest and create jobs.” Other indicators of the strength of the jobs market, including the number of hours worked across the economy and the number of vacancies available, all revealed a marked deterioration. Michael Saunders, UK economist at Citigroup, said: “The labour market data showed broad-based weakness, with slowing employment, rising unemployment, falling hours, falling vacancies and rising redundancies. Further significant increases in unemployment probably lie ahead for coming months.” A record 1.26 million people reported that they were working part-time or in a temporary job because they had been unable to find a full-time role. Chris Williamson, chief economist at Markit, said, “business confidence clearly needs to rise before employment growth will pick up again, but at the moment the surveys suggest that companies remain worried about economic growth both at home and abroad and are generally erring towards cost-cutting rather than expansion”. Labour warned that the government’s deficit-reduction plans could be blown off course by rising joblessness. Kerry McCarthy, a shadow Treasury minister, said: “The Tory-led government is at risk of creating a vicious circle of lower growth and higher unemployment – fewer people in work paying taxes makes it harder to get the deficit down.” The TUC’s analysis showed that in the London borough of Haringey, which includes riot-hit Tottenham, there are almost 29 benefit claimants for every vacancy. With only 367 vacancies and 10,518 people out of work and claiming benefit, Haringey is second in the list of places where jobs are hardest to find. Hackney and Lewisham, which were also affected by rioting, are also in the top 10, with 22 and 21 claimants respectively for each potential job. In Hackney, there were fewer than 500 vacancies for more than 11,000 claimants, while in Lewisham just over 10,000 people were after 487 available jobs. In London as a whole, unemployment as measured by the claimant count rose by 22,000 between April and June, the latest month for which data is available, pushing the total above 400,000. The TUC analysis found that seven of the UK’s toughest labour markets were in Scotland and Wales, which were unaffected by last week’s riots. West Dunbartonshire had the highest ratio of claimants to available jobs (31.8), with 3,815 people and 120 vacancies. David Blanchflower, the labour market economist and former member of the Bank of England’s monetary policy committee, said: “The relative matters: if you live in Hackney, you can very easily see people in Islington doing just fine: it’s being waggled in front of you.” Young people had borne the brunt of the weakness in the labour market, he said. A total of 949,000 16- to 24-year-olds, or 20.2% of the young workforce, were unemployed, the figures showed. Women also appear to be suffering disproportionately, because of their high concentration in the public sector. Of the 38,000 increase in unemployment over the quarter, 21,000 were women, according to the ONS. The number of women out of work is now 1.05 million, the highest since the spring of 1988. For those who have managed to stay in work, there was some evidence that pay deals are starting to creep up, with average earnings growing at an annual rate of 2.6%, up from 2.3% in the three months to May. Unemployment UK riots David Cameron Young people Women Heather Stewart guardian.co.uk

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