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UK – Employment is up but job recovery still rocky

18 July 2012

The labour market in the UK is showing some signs of stability after today’s job statistics revealed that the number of people out of work dropped by 65,000 to 2.58 million in the quarter to May, the Office for National Statistics said.

The joblessness rate reached 8.1% in the three months, down from 8.3% in the previous quarter. But labour analysts have warned that the route to recovery still remains long and rocky and caution still remains in place.

The statistics indicated that in the period the employment rate for those aged 16 to 64 increased to 70.7% from 70.4% in the previous quarter. Employment was up by 181,000 on the quarter, taking the number of employed people to 29.35 million. London alone recorded a gain in employment of 61,000 which analysts believe is a positive side-effect of the Olympics.

“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,” said Gerwyn Davies, Labour Market Adviser at the Chartered Institute of Personnel and Development (CIPD).

The number of people claiming unemployment benefits in June was up by 6,100 on the previous month to reach 1.6 million. There has also been an increase in the number of people out of work for two years or more, which rose by 18,000 to 441,000. 

“The most positive aspect about today's figures is that, while part-time employment continues to rise, the bulk of the growth in employment is full-time. The most worrying aspect of today's figures is the rise in long-term unemployment,” Mr Davies warned.

Emilie Bennetts, Associate at law firm Charles Russell also cautioned that “the statistics continue to mask a nine-year low in public sector employment and widespread youth unemployment, all set against the backdrop of ongoing turbulence in the eurozone.  While any increase in employment should certainly be celebrated, prudent analysts will approach these figures with caution.”

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