Number in work rises, but youth unemployment hits record high

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New figures show rise in people in work, but Government aims to create 35,000 more jobs for the long term unemployed , as youth unemployment hits 19.8% (a record high)

The Government has welcomed the news that the number of people in work has risen this quarter by 6,000 according to figures published by the Office for National Statistics today.

Today’s figures also show that ILO (International Labour Organisation) unemployment has risen more slowly than many expected. At 30,000 this quarter’s rise is the lowest in more than a year. ILO unemployment is 2.46 million (7.8%), reinforcing the fact that the UK labour market is performing better than most major economies.

Ministers said that the figures showed the Government’s action on the economy was making a real difference.

However they warned that labour market difficulties were still expected to continue for some time to come, with further rises in unemployment expected next year. Ministers said they were determined to provide more help especially for young people.

Young People Still Need Help

The Government today announced the next 35,000 jobs to be created for the young and long term unemployed through the Future Jobs Fund – bringing to 95,000 the total number of jobs announced through the Fund so far.

Today’s figures show that the number of 16-24 year olds classed as ILO unemployed is lower than last month’s figure of 946,000. But it has increased by 15,000 over the quarter to 943,000. Most of that increase is accounted for by a 14,000 rise in the number of full time students who say they are looking for work.

In total 267,000 (28%) of the 943,000 are now shown to be in full time education. The UK youth unemployment rate, even including the students looking for work, remains below the EU average.

The figures also show a major increase of 126,000 in the total number of young people in full time education over the same period, reflecting the substantial expansion of education places, including the September Guarantee.

Secretary of State for Work and Pensions, Yvette Cooper said:

“The figures show more people in work and a lot more young people taking up our offer of full time education and training, which is welcome news.

“The fact that unemployment is significantly lower than everyone forecast at the beginning of the year shows the support for the economy is making a real difference. But we know things are still tough for a lot of families, and unemployment is expected to increase further next year. That’s why we’re determined to do more with an extra 35,000 youth jobs, more apprenticeships and education places so we can guarantee no young person gets stuck in long term unemployment.”

Commenting on the 19.8 per cent figure for youth unemployment , Carl Gilleard, Chief Executive of the Association of Graduate Recruiters, said: “Today’s unemployment figures are a major disappointment. We know that there are far fewer graduate vacancies this year and that the situation for graduates is tough. However, it is crucial recent graduates do not lose heart and use any time without employment productively. We know employers continue to place real value on a university degree.

“It is still too early to say whether we are likely to see an improvement in 2010 but there is optimism amongst graduate recruiters that the situation should start to ease somewhat. We saw one in four graduate vacancies disappear this year and it will take time before 2008 levels are restored.

“AGR is supporting the Government’s Backing Young Britain campaign which is calling on all employers to reaffirm their commitment to giving young people new employment opportunities.”

International Comparisons

The figures, out today, also reinforce the fact that the UK labour market is performing better than most major economies. They show UK unemployment at 7.8%, compared to an EU average of 9.2% and lower than 14 other EU countries including France (10.0%), Ireland (13.0%) and Spain (19.3%), as well as the US (10.2%) and Canada (8.6%)

Employment Minister Jim Knight said:

“When faced with the worst global recession since the 1930s we made a decision to give jobseekers the support they need, investing £5bn since last November in creating jobs, bringing in front line advisers to Jobcentre Plus and expanding training and apprenticeships.

“Today’s figures show that while there is still more to do our investment is making a real difference to people’s lives and ensuring that our labour market is performing well compared to other leading economies.”

Background to labour market statistics: October 2009

This month’s Labour Force Survey covers July 2009 to September 2009. The claimant count and Jobcentre Plus vacancy count dates were 8th and 2nd October respectively.

The number of people in work rose this quarter

  • nearly 29 million people were in work in July to September.
  • employment level in July-September was 6 thousand higher than the previous quarter and 490 thousand lower than in the same quarter last year.
  • the employment rate is 72.5%, down 0.1 percentage points on the quarter and down 1.9 percentage points on the year
  • number of workforce jobs is 30.9 million in June 2009, down 163 thousand on the quarter and 664 thousand on the year.

The number of people claiming JSA has risen this month

  • claimant unemployment was 1,639.5 thousand in October 2009, up 12.9 thousand on the level in September, and up 632.7 thousand on the year.
  • the claimant unemployment rate, at 5.1%, is virtually unchanged on the month and up 1.9 percentage points on the year.
  • inflows to JSA were 361.4 thousand in October, up 4.0 thousand on the month and up 80.8 thousand on the year. The number of people leaving JSA increased to 333.9 thousand, down 1.3 thousand on the month and up 104.5 thousand on the year.
  • In the year to May 2009, the number of people claiming employment support allowance/incapacity benefits rose by 25,600 to 2.6 million. more recent provisional estimates suggest that there were 2.63 million claimants in September 2009, unchanged on the month but up slightly from the level a few months ago.
    in the year to May 2009, the number receiving lone parent benefits fell 18,100 to 720,500. Provisional figures for September 2009 suggest a continued downward trend in the number of lone parents on benefit (driven by the recent conditionality reforms).

ILO unemployment has risen this quarter

  • 2.46 million people were ILO unemployed in the July to September quarter, up by 30 thousand on the April to June period and up 629 thousand on the same quarter last year.
  • the ILO unemployment rate is 7.8%, up 0.1 percentage points on the quarter and up 2.0 percentage points on the year.

The number of 18-24 year olds who are unemployed has increased

  • 746 thousand 18-24 year olds were ILO unemployed in the July to September quarter, this is up by 24 thousand on the April to June period and up 165 thousand on the same quarter last year.
  • Of the 943 thousand unemployed under 25 year olds, 267 thousand are in full time education.
  • There were 500 thousand 18-24 year olds claiming JSA in October up by 8 thousand on the level in September and up by 187 thousand on the year.

The level of economic inactivity is up on the quarter and up on the year

  • the economic inactivity level is 7.9 million, up 41 thousand on the quarter and up 132 thousand on the year.
  • the economic inactivity rate is 21.1%, up 0.1 percentage points on the quarter and up 0.2 percentage points on the year.
  • excluding students, inactivity as a proportion of the working age population is unchanged at 15.3% on the quarter but down 0.2 percentage points over the last year.

There are still many vacancies available, and the number of redundancies has fallen back this quarter:

  • There were 205 thousand redundancies in June to August, down 63 thousand on the previous quarter and up 49 thousand on the previous year.
  • ONS’s vacancy survey estimates an average of 428 thousand unfilled vacancies in the three months to October 2009, down a thousand on the quarter and down 154 thousand on the year.
  • In the last month Jobcentre Plus has taken on average over 10,000 new vacancies every working day and many more come up through other recruitment channels

Earnings growth in the year to August was 1.6%, down 0.2 percentage points from the July figure:

  • excluding bonuses, average earnings growth was 1.8%, down 0.1 percentage points from the August figure.

 

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