Long-term unemployment reaches highest level in 15 years

The number of people who have been unemployed for more than two years has risen to its highest level since 1997, despite an overall fall in unemployment.

This is according to the latest labour market figures from the Office for National Statistics (ONS), which found that the total number of people unemployed for more than two years had increased by 18,000 in the three months to May 2012, to reach 441,000.

There were positive signs in the labour market, however, as the employment rate rose by 181,000 on the previous quarter, the biggest increase since 2010.

At the same time, the unemployment rate fell by 65,000 during the three months to May to reach 2.58 million, but was still up 132,000 on the previous year.

Experts have welcomed the rise in employment but have warned that there are still causes for concern in the figures.

Tom Hadley, director of policy at the Recruitment and Employment Confederation, said: “Today’s figures are good news and are further evidence that it is possible for the private sector to compensate for public-sector job losses. However, we still need to be cautious. Tens of thousands of university, school and college leavers will be entering the job market over the summer and our latest data from recruiters shows hiring activity is slowing.

“The increase in long-term unemployment is a real concern which must be addressed immediately. Prevention is the best cure and now is the time to open a proper debate about providing earlier support and guidance for job seekers, rather than waiting for 12 months.”

The Chartered Institute of Personnel and Development (CIPD) pointed out that the rise in employment is at odds with the current economic climate.

Gerwyn Davies, labour market adviser at the CIPD, explained: “The labour market continues to defy the laws of economic gravity, with employment up and unemployment down, despite stalling growth forecasts and stuttering confidence.

“The downside is that, for now, we have a seemingly entrenched pattern of falling productivity and subdued pay affecting the competiveness of employers and the living standards of employees.

“The employment picture is encouraging, but the missing ingredient is economic growth, without which the risk remains that another shock of any kind may send our surprisingly resilient labour market into reverse.”

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