The latest unemployment figures from the Office of National Statistics show that from for the three months to May 2010, the unemployment rate was 7.8% – a fall of 0.1%. The number of unemployed people fell by 34,000 over the quarter to reach 2.47 million, a drop driven in part by the fact the public sector jobs cull has yet to kick in.
The number of people unemployed for up to six months fell by 54,000, to reach 1.16 million. However, the number of people unemployed for more than 12 months increased by 61,000 over the quarter to reach 787,000 – the highest figure since the three months to March 1997.
The statistics, published today, also show the employment rate was 72.3% and there were 28.98 million employed people, an increase of 160,000. The quarterly increase in total employment was mainly driven by part-time employees, which increased by 117,000 on the quarter to reach 6.63 million, and self-employment, which rose by 59,000 on the quarter to reach 3.93 million. The number of full-time employees fell by 22,000 on the quarter to reach 18.2 million.
The inactivity rate was 21.3% and there were 8.1 million working-age inactive people. The statistics show total pay (including bonuses) rose by 2.7% on a year earlier, compared to regular pay (excluding bonuses), which rose by 1.8% over the same time.
Regardless of the positive news about unemployment figures, industry commentators remain pessimistic about the future.
Ahead of today’s figures, the Chartered Institute of Personnel and Development (CIPD) released a report that claimed the UK only needs economic growth slightly weaker than the Office for Budget Responsibility’s (OBR) current central forecast to seriously reduce jobs prospects until 2015.
The CIPD predicts the UK economy will need to grow by at least 2.5% per year over the next five years to create enough jobs to compensate for the impact of the massive slashes to public spending announced by the new government. Current forecasts from the OBR predict growth of 2.5% with a net gain in employment of 1.3 million between now and 2015. The CIPD, on the other hand, forecasts the economy will shed 300,000 jobs by 2012, before rising to just 100,000 above the 2010 level.
John Philpott, chief economic adviser at the CIPD, said: A slightly milder growth outcome – which many would consider a decent recovery in output given the various strong headwinds facing the economy – is easily imaginable as the OBR’s central forecast would leave unemployment still close to 2.5 million by 2015, meaning Britain faces at least half a decade of serious prolonged jobs deficit.”