Mixed picture as jobless rate falls but claimants increase

June 15, 2011
By

Employment figures released today had the Government claiming strong new private sector jobs growth at the same time as experts were warning that a shock rise in the number of benefit claimants could herald tougher times ahead.

In Swindon, unemployment edged down by 0.3% – or 450 people – in May to 3.4%, compared to the same month last year. While that is below the national rate of 3.7%, it is much higher than the South West rate of 2.5 per cent and the fourth-highest of any town or city in the region.

Official figures for the number of people without a job across the country recorded the biggest decline since August 2000 – down by 88,000 to 2.43m in the three months to April.

Employment minister Chris Grayling hailed the data as "very encouraging" and said they showed the private sector is creating jobs much faster than the public sector is axing them .

But the number of people on unemployment benefit shot up by a worse-than-expected 19,600 last month – the sharpest increase in almost two years – to give a jobless total of 1.49m. May's rise was more than twice the forecast increase.

Chartered Institute of Personnel and Development chief economist John Philpott told the BBC the underlying jobs figures were "quite a sad story for many people and hard times still to come".

Many were trading down to find jobs, while those in work were seeing their incomes squeezed. He warned that because the full impact of the government spending cuts had not yett been felt “the scale of public sector job cuts is going to be quite substantial”.

Today’s figures also show the number of people working part time because they could not find a full-time job increased to just over 1.2 million, the highest since modern records began.

Economists said the figures are likely to add to pressure on the Bank of England to peg interests rates at their historic low of 0.5% for the rest of this year.

 

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