Part-time work drives fastest growth in employment rate since records began

The number of people in employment grew at the fastest rate since records began in the three months to July, official figures have revealed.

Employment for the quarter rose by 286,000 to 29.16 million, representing a 0.4% rise in the rate to 70.7%. This is the biggest quarterly rise since 1971, according to the Office for National Statistics (ONS).

This was largely driven by a rise in the number of part-time workers, with the ONS saying that more students may be taking on part-time jobs alongside their studies.

The inactivity rate was 23.2%, down 0.4% on the quarter. There has not been a larger quarterly fall in the inactivity rate since the three months to January 1984.

The number of people unemployed fell by 8,000 to 2.47 million in the three months to July, meaning the overall UK unemployment rate remained at 7.8%. However, the figures also showed that the claimant count – those out of work and receiving unemployment benefit – rose by 2,300 in August to 1.47 million.

The number of vacancies for the three months to August 2010 was 467,000, down 14,000 over the quarter. The sector showing the largest quarterly fall was education where the number of vacancies fell by 11,000 to reach 39,000.

The earnings annual growth rate for total pay (including bonuses) was 1.5% for the three months to July 2010, up from 1.1% for the previous quarter. The earnings annual growth rate for regular pay (excluding bonuses) was 1.8% for the three months to July 2010, up from 1.6% from the previous quarter.

Nigel Meager, director of the Institute for Employment Studies, said: “While the employment data covering the period May to July were generally strong, with growing employment and a small fall in the broader measure of unemployment, there remain reasons for concern. The rise in claimant unemployment in August, although modest, is an unwelcome reminder of how fragile the labour market remains. And, as the most up-to-date indicator of what is happening, it suggests a weakening picture.

“The fall in the number of vacancies in the three months to August was driven entirely by the drying up of public sector vacancies, which was barely offset by limited growth in private sector opportunities. The figures highlight how delicate the balance will be over the coming months, and suggest that current private sector growth may not be adequate to ameliorate the impacts of reduced public sector employment.”

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