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UK unemployment rises to 2.53 million

In the three months to January 2011, unemployment reached 2.53 million, which is the highest figure since 1994, according to figures from the ONS. This means that the unemployment rate has reached 8%, up 0.1% from the previous three-monthly period, as an additional 27,000 people lost their jobs.

However, by contrast, the numbers claiming Jobseeker’s Allowance (the claimant count) actually fell by 10,200 in February to 1.45 million, which was the largest reduction since June 2010.

What is absolutely definite is the desperation of many young people trying to get on the job ladder, and older people trying to make a way back from redundancy. We have been interviewing for a post of General Office Assistant this week, and have had almost 50 applicants. Many of these applicants had upper second class honours degrees and a number had impressive postgraduate degrees and qualifications.

 

Will the job situation improve? I can’t see it getting much better in the short-run.  Although the private sector is doing well, cannot it cover for the expected loss of jobs in the public sector?  The latest figures show that in the last quarter of 2010, private sector employment grew by 77,000 whilst central government saw a loss of 45,000 jobs. I know from talking to friends that there are an awful lot of local authority job cuts in the pipeline as well.

In fact 132,000 public sector workers lost their jobs between the last quarter of 2009 and the same quarter of 2010, with 66,000 being cut from local government, on top of the loss of the 45,000 jobs in central government.

The government is to launch its new Work Programme in the summer which will offer special help to each individual to get them back into work. But this can only happen if there are jobs out there for them. Currently there are almost 500,000 vacancies but this would only provide one job for every five people searching.

What is also evident is that at the older end of the workforce, employees are hanging on in there. There are a record number of 50-64 year olds in work at the moment, showing a rise of 25,000 in the quarter to January, to reach 7.3 million. At the same time there was a rise of 56,000 in the number of over-65s in work to reach 900,000, which is the highest since records began in 1992.

The only real good news from this is that unemployment is putting a brake on wage demands, with underlying annual wage growth currently at 2.2% which is well below the rate of inflation. This will help the Bank of England to hold off on the need to raise interest rates at the moment.

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Posted in Earnings, Employment, unemployment

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