20 January 2010 – Unemployment and Youth Unemployment fall as Government Increases help for Unemployed

The government today welcomed the drop in the December unemployment and youth unemployment figures but warned that the jobless total was still expected to rise again before the summer.

ONS Statistics show a 7,000 drop in the ILO measure of unemployment, a 15,000 drop in the claimant count and a 7,600 drop in the youth claimant count in December. The employment level fell by less than in previous quarters and the number of vacancies increased. A significant increase in the number of full time students has increased the inactivity figures.

These figures mean that unemployment is 450,000 lower than predicted at the time of the Budget, reflecting the £5bn extra investment in expanding education and training, supporting jobs and helping the unemployed back to work. Even more support for young people is being introduced later this month.

Secretary of State for Work and Pensions Yvette Cooper, said:

“The jobs market is still tough for a lot of people, but the drop in unemployment and youth unemployment is very welcome. It means 450,000 fewer people are out of work than everyone expected last spring. The extra investment in jobs, education and training is making a real difference, helping people through the recession and preventing the kind of unemployment we saw in the eighties and nineties.

"However we know that things will still be difficult and unemployment is still likely to rise over the next few months. That is why we are determined to keep increasing the help and support to get people into jobs and training.”

Minster for Employment Jim Knight, said:

“These figures show the largest number of people coming off unemployment benefit for 15 years which is a sign that our £5bn investment to get people back to work is having an impact. The fact that tens of thousands more young people are taking up the Government’s guarantee of a place in education or training means that they are getting the valuable skills they need to get into work.

"New figures published today show that more than 25,000 people have benefited from the new Six Month Offer, while the sixth round of winning Future Jobs Fund bidders will create almost 6,000 more jobs for young people. This brings the total number of successful bids to create jobs through the Fund so far to almost 104,000. This is in addition to more than 400,000 people who have been helped into jobs through the Job Centres’ Local Employment Partnerships."

Today’s employment figures published by the Office for National Statistics show:

• ILO unemployment fell by 7,000 on the quarter to 2.46 million (7.8%).
• The number of people claiming JSA fell by 15,200 on the month to 1.606 million (5pc compared to around 10pc in the 80s and 90s).
• The number of young people classed as ILO unemployed fell by 16,000 on the quarter to 927,000; these figures include 269,000 who are actually students in full time education but are looking for work, including part time work.
• Excluding full time students, the number of young people ILO unemployed is 658,000, and dropped by 26,000 on the quarter.
• The number of young people claiming JSA fell by 7,600 on the month.
• Number of vacancies has increased by 16,000 to 448,000.
• The number of people in work has decreased by 14,000 on the quarter to 28,921m
• The number of people classed as economically inactive rose by 79,000, but this includes an 81,000 rise in the number of students.
• If you take out students economic inactivity fell by 2,000 on the quarter.
• The overall number of people classed as economically inactive includes a record number of over 2 million students.
• In stark contrast to previous periods of economic downturn when the numbers on inactive benefits rose dramatically, in this recession the numbers on Incapacity Benefit/Employment and Support Allowance have remained broadly similar while the number of lone parents receiving income support has continued to fall.
• Government is today announcing successful bids for a further 6,000 youth jobs, as part of the future jobs fund to be delivered over the next 18 months
• From next week all young people out of work and claiming JSA for six months or more will be guaranteed a job, work focussed training or work experience

Notes to Editors

Headline statistics

Employment

Employment fell slightly this quarter:

• nearly 29 million people were in work in September to November.
• employment level in September-November was 14 thousand lower than the previous quarter and 451 thousand lower than in the same quarter last year.
• the employment rate is 72.4%, down 0.1 on the quarter and down 1.7 percentage points on the year

Workforce Jobs

Number of workforce jobs is 30.9 million in September 2009, down 127 thousand on the quarter and 649 thousand on the year.

• Largest falls in manufacturing industries (down 44 thousand on the quarter), construction (down 67 thousand) and finance and business services (down 28 thousand).
• There were increases in; education, health and public administration (36 thousand) and distribution, hotels & restaurants (13 thousand).

Key Out-of-Work Benefits

The number of people claiming JSA has fallen again this month:

• claimant unemployment was 1,606.5 thousand in December 2009, down 15.2 thousand on the level in November, and up 430.7 thousand on the year.
• the claimant unemployment rate, at 5.0%, is unchanged on the month and up 1.3 percentage points on the year.
• inflows to JSA were 328.3 thousand in December, down 3.5 thousand on the month and up 2.7 thousand on the year. The number of people leaving JSA increased to 351.7 thousand, up 14.3 thousand on the month and up 116.5 thousand on the year.
• In the year to May 2009, the number of people claiming employment support allowance/incapacity benefits rose by 25,600 to 2.6 million.  More recent provisional estimates suggest that there were 2.62 million claimants in November 2009, down on the month and only slightly above the level in May 2009.
• in the year to May 2009, the number receiving lone parent benefits fell 18,100 to 720,500.  Provisional figures for November 2009 showed a small rise on the previous month, though the underlying trend continues to improve, driven by the recent conditionality reforms.

ILO Unemployment

ILO unemployment has fallen this quarter:

• 2.46 million people were ILO unemployed in the September to November quarter, down by 7 thousand on the June to August period and up 511 thousand on the same quarter last year.
• the ILO unemployment rate is 7.8%, unchanged on the quarter and up 1.6 percentage points on the year.

Youth Unemployment

The number of 18-24 year olds who are ILO unemployed has fallen:

• 728 thousand 18-24 year olds were ILO unemployed in the September to November quarter, this is down by 12 thousand on the June to August period and up 111 thousand on the same quarter last year.
• Of the 927 thousand ILO unemployed under 25 year olds, 269 thousand are in full time education.

There were 483.7 thousand 18-24 year olds claiming JSA in December down by 7.6 thousand on the level in November and up by 121.7 thousand on the year.

Inactivity

The level of economic inactivity is up on the quarter and up on the year:

• the economic inactivity level is 8.0 million, up 79 thousand on the quarter and up 202 thousand on the year.
• the economic inactivity rate is 21.2%, up 0.2 percentage  on the quarter and up 0.4 percentage points on the year.
• The rise in inactivity over the last year is entirely the result of more inactive students.  Excluding students, inactivity as a proportion of the working age population is unchanged at 15.3% on the quarter but down 0.1 percentage points over the last year.

Redundancies and vacancies

There are still many vacancies available, and the number of redundancies has fallen back this quarter:

• There were 182 thousand redundancies in September to November, down 31 thousand on the previous quarter and down 46 thousand on the previous year.
• ONS’s vacancy survey estimates an average of 448 thousand unfilled vacancies in the three months to December 2009, up 16 thousand on the quarter and down 80 thousand on the year.
• In the last month Jobcentre Plus has taken on average over 10,000 new vacancies every working day and many more come up through other recruitment channels

Earnings Growth

Average earnings growth in the year to November was 1.6%, up 0.1 percentage points from the October figure:

• excluding bonuses, the 3-months average earnings growth was 1.7%, down 0.1 from the October figure.

ONS introduced a new series this month on average weekly earnings.  This is intended to replace the average earnings index as the headline measure for earnings.

This shows that total weekly pay in September-November was up by 0.7% over the year:

• growth in regular weekly pay, excluding bonuses, was 1.1% on the year

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