13 July 2011 – Grayling: latest unemployment fall still leaves the Government with labour market challenges

The Government says that the latest fall in unemployment still means that there are big economic challenges ahead. The latest figures show a fall in unemployment (ILO measure) to 2.45 million and a rise in the number of people in work to nearly 29.3 million. However, the number of people claiming Jobseeker’s Allowance has risen by 24,500, underlining that the jobs market is still fragile and Government must continue to take measures to support the economy and encourage growth.

The figures published today by the Office for National Statistics show a quarterly fall in youth unemployment with 18,000 fewer 16-24-year-olds not in full time education and looking for work - the overall figure now stands at 644,000.

Ministers are clear that while the labour market has stabilised over the past few months and over the past year private sector employment has risen by around 500,000, there are still challenges ahead.

Employment Minister Chris Grayling said:

"There continue to be some encouraging signs in the labour market figures, particularly with the continued rise in private sector employment. It's really important that we continue to support the economy and encourage businesses to invest and create jobs.

"However, we do not underestimate the scale of the challenge that we face to help people into employment. We always said that the road to recovery would be choppy; for people who lose their jobs our new Work Programme is now up and running and will offer jobseekers flexible support tailored to their needs to help them into employment."

The Government has already taken urgent steps to support growth and rebalance the economy, including:

• keeping interest rates low and creating confidence in the economy to help to create jobs;
• creating real incentives for businesses to grow and create job opportunities;
• announcing four annual reductions in corporation tax;
• cutting the small companies rate;
• expanding loan guarantees;
• investing in science and apprenticeships;
• promoting exports through major trade missions;
• launching the New Enterprise Allowance (NEA) which will help up to 40,000 businesses get up and running;
• supporting work clubs and enterprise clubs across the country.

Last month the Government launched the new Work Programme to give jobseekers the help to get back into sustained employment. Private and voluntary sector organisations are investing £581 million upfront in the biggest welfare to work programme this country has ever seen to provide tailored support built around the needs of individuals. Organisations will be paid by results and allowed to develop support that really addresses the needs of jobseekers.

This week the Government has also launched a consultation into disability employment services, based on recommendations from RADAR chief executive Liz Sayce.

Recommendations include expanding Access to Work – which gives financial help to support workers, interpreters and equipment to enable disabled people to keep and get jobs. The funding for specialist disability employment support is being protected, but by spending the money more effectively, Sayce suggests an extra 35,000 disabled people can be supported into work. Access the consultation at: www.dwp.gov.uk/sayce-consultation

Notes to Editors:

Background to labour market statistics: July 2011

This month’s Labour Force Survey covers March to May 2011. The claimant count and Jobcentre Plus vacancy count dates were 9th and 3rd June 2011 respectively.

The number of people in work rose this quarter

• 29.28 million people were in work in March to May 2011.
• the employment level was 50 thousand higher than the previous quarter and up 309 thousand on the year.
• the employment rate is 70.7%, unchanged on the quarter, but up 0.2 points on the year.

ILO unemployment fell this quarter

• 2.45 million people were ILO unemployed in the March to May quarter, down by 26 thousand on the December to February period and down 23 thousand on the same quarter last year. 
• the ILO unemployment rate is 7.7%, down 0.1 percentage points on the quarter and year

The number of people on JSA rose again this month, but the number claiming one of the other main out-of-work benefits is improving:

• claimant unemployment was 1,520.1 thousand in June 2011, up 24.5 thousand on the level in May 2011, and up 50.9 thousand on the year. 
• the claimant unemployment rate, at 4.7%, is up 0.1 percentage points on the month and up 0.2 percentage points on the year.
• the figures continue to be affected by welfare reform, including the ongoing process to re-assess existing claims for incapacity benefits, and this is likely to have made some contribution to the rise in the JSA caseload.
• in the year to November 2010, the number claiming incapacity benefits fell 32,000 to 2.59 million. The most recent provisional figure for May 2011 suggests the caseload has since fallen further to 2.57 million.
• in the year to November 2010, the number of lone parents on income support fell 47,400 to 648,300. Provisional figures for May 2011 suggest the number has fallen further in recent months, to 595,000, driven by welfare reform.

The level of economic inactivity is up on the quarter but down on the year

• the economic inactivity level is 9.3 million, up 32 thousand on the quarter but down 11 thousand on the year.
• the economic inactivity rate is 23.2%, up by 0.1 points on the quarter but down 0.1 points on the year.
• excluding students, inactivity as a share of the 16-64 population is 17.6%, unchanged on the quarter but down 0.1 points on the year.

The number of redundancies rose this quarter and the number of unfilled vacancies fell

• There were 144 thousand redundancies in March to May 2011, up 16 thousand on the previous quarter but down 15 thousand on the year.
• ONS’s vacancy survey estimates an average of 458 thousand unfilled vacancies in the three months to June 2011, down 26 thousand on the quarter and the year.  Taking account of the impact of one-off vacancies associated with the Census, the underlying level of vacancies is close to flat.

Total weekly pay in March to May was up by 2.3% over the year

• growth in regular weekly pay, excluding bonuses, was up 2.1% on the year

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