Unemployment hits highest figure since 1994

UK employment figures rose by 128,000 in the three months to October to 2.64 million, the highest level since 1994.

According to the Office for National Statistics (ONS), the jobless rate was 8.3%, up from 7.9% three months ago, its highest rate since 1996. After breaking one million last month, youth unemployment rose again during this period, reaching its highest level since records began in 1992, at 1.027 million.

The number of people claiming jobseeker’s allowance increased by 3,000, which was much less than some economists had predicted, suggesting that the increase in claimants is slowing down.

The number of “economically inactive” people (those who are not in the labour market, such as students) also decreased to 9.33 million, down 54,000 on the previous quarter.

The total number of people in employment in the three months to October fell by 63,000 compared with three months earlier, to 29.11 million. This was largely driven by 67,000 job losses in the public sector, while the private sector added just 5,000 jobs over the same period.

Total pay (including bonuses) rose by 2% on one year earlier, down 0.3 percentage points on the three months to September 2011, with both the private and public sectors showing lower pay growth). Regular pay (excluding bonuses) rose by 1.8% on one year earlier, up 0.1 percentage points on the three months to September 2011.

The ONS figures coincide with the Chartered Institute of Personnel and Development’s (CIPD) latest Work Audit, which looked at how the downward job market trends have affected men and women differently. Its analysis of employment statistics found that, while men benefited most during the initial post-recession jobs recovery in 2010, women have fared slightly better than men during 2011, despite public sector cutbacks and a sharp fall in part-time employment. However, this might change as more public sector job losses hit, as two-thirds of public sector workers are female.

Commenting on the ONS figures, John Philpott, chief economic advisor to the CIPD, said: “These pre-festive-season jobs figures are so bad even Santa’s elves will be feeling insecure. The quarterly rise of 128,000 in unemployment is itself enough to dampen the spirits but what’s worse is news that private sector job growth is almost at a standstill while public sector employment is falling at twice the rate projected by the Office for Budget Responsibility.

“In the year to September, the fall in the number of people working in the public sector [excluding the nationalised financial institutions] was slightly greater (-266,000) than the corresponding increase in private sector employment (+262,000). The hope that private sector job creation would offset large scale public sector job cuts even in the short run has proved false and unemployment will continue to climb throughout 2012 regardless of what happens in the eurozone.

“The latest figures continue the pattern seen throughout 2011, with the jobs situation deteriorating for both sexes but men doing worse than women. This is somewhat surprising given the relatively high proportion of women working in the public sector, though the puzzle becomes a little easier to understand with new data showing that employment is falling sharply again in manufacturing and construction, sectors where most workers are men. If the white-collar jobs recession in the public sector is hitting women relatively hard, another blue-collar jobs recession in the private sector is making life just as tough for men.”

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