Unemployment has fallen by 17,000 to 2.48 million, according to the latest Office for National Statistics figures released today.
The latest figures mean that the overall rate of unemployment in the UK now stands at 7.8% and total pay rose by 2% compared with a year ago.
The figures also showed that youth unemployment has remained steady at 963,000, which might help to calm the fears of organisations that had expressed concern about growing unemployment among the young.
Prior to the publication of today’s figures, the TUC had predicted that youth unemployment would reach the “grim milestone” of one million. However, while growth in youth unemployment has slowed, the jobless rate for young people remains above 20%.
The unemployment figures have been welcomed by employment groups, although some reservations remain.
John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, said: “It’s clearly good news week for the UK economy. However, while the jobs figures are apparently signalling green for go, they reflect an improvement in the labour market at the turn of the year and don’t tell us anything much about the road ahead. Indeed, the most up-to-date figures for vacancies and claimants of jobseeker’s allowance suggest that labour market conditions softened again in the early spring and it remains likely that unemployment will start to rise again later this year.”
The Work Foundation’s director of socio-economic programmes, Ian Brinkley, said: “These are better figures than expected. The strong growth in full-time work is especially encouraging as this is a key indicator of sustained recovery. However, with the economy as a whole remaining weak, we cannot count on this good news continuing. And serious underlying structural problems remain, especially unemployment among young people and long-term unemployment among the over-50s, which will persist for many months to come.”
David Kern, chief economist at the British Chambers of Commerce, also welcomed the findings but urged caution: “The figures are welcome, but they should not lead to any complacency. The Government must create the right environment for the private sector to create jobs. As the deficit-cutting programme starts to bite, public sector employment will decline further.
“We are expecting UK unemployment to increase further over the next year, and to peak at around 2.65 million before starting to decline. These figures show that growth in earnings has weakened, particularly in the private sector, and reinforce the case against an early increase in interest rates. Since there is little risk of a wage-price spiral, the Monetary Policy Committee should postpone interest rate increases until later in the year when the recovery is more secure.”
Meanwhile, figures released today by recruitment website Totaljobs.com, reveal a surprise growth in job vacancies with a steady acceleration in the number of jobs posted on the site during the first quarter of 2011, with a peak of 134,000 jobs in March. In addition, the end of the quarter saw the largest month-on-month gain for a year, with 12% growth.
John Salt, director at Totaljobs.com said: “We’re surprised at the pace of the recovery, but we have a lot of ground to make up before the balance tips back in favour of jobseekers. It is still an employer’s market, and competition for positions will remain high until jobs growth outstrips jobseeker demand.
“Our forecast for the second quarter is for a dip in activity due to Easter and the royal wedding, but we are confident that the recovery will continue and we can look forward to a period of solid growth.”