Employment rises to surprise record high
Unemployment takes an unexpected fall and the number of people working rises to nearly 30 million, boosted by a rise in part-time work. Channel 4 News looks behind the numbers.
The number of unemployed fell by 50,000 to 2.53 million over the summer, the lowest level since June 2011, according to the latest figures from the Office for National Statistics.
The good news about jobs creation will raise hopes that the figures reflect growth in the economy from June to August this year.
Over the three month period, employment grew to 29.59 million, the highest since records began in 1971. This is largely due to an increase in part-time work, which rose to a record high of 8.13 million: of the 212,000 jobs created in the three month period, 125,000 were part-time.
The number of people taking part-time jobs, because they could not find full-time work, has also come close to a record high of 1.4 million.
Despite the tough economic times, the private sector continues to create jobs and our welfare reforms are encouraging people to return to work. Employment Minister Mark Hoban
After figures for the second quarter of the year showed a fall in unemployment, the number of people out of work was expected to stay at around the same level for June to August and Wednesday’s figures come despite the fact that the UK economy is currently in recession. One possible explanation for the rise in employment, particularly in London in August, could be the effect of the Olympic Games.
Welfare reforms ‘encouraging work’
The number of people claiming jobseeker’s allowance fell for the third consecutive month to 1.57 million – the lowest total since July 2011.
In the Commons, the prime minister said the figures showed Britain “can be a winner”. The figures were also welcomed by Employment Minister Mark Hoban. “Despite the tough economic times, the private sector continues to create jobs and our welfare reforms are encouraging people to return to work – with 170,000 fewer people on the main out-of-work benefits than in May 2010,” he said.
There was also good news for the 16 to 24-year-old group: youth unemployment fell below the one million mark to 957,000.
Read more on FactCheck: Has Cameron hit the million job mark?
More jobs, fewer hours?
While the employment figures were widely welcomed, analysts said that caution on what this means for the economic outlook is still needed, with many acknowledging confusion over why unemployment has fallen despite the economy contracting.
The CIPD pointed to the “growing tail of long-term unemployed” and said the fact that a third of the increase in employment was due to temporary work highlighted employers’ continued uncertainty about the future.
Economist John Philpott highlighted the fact that one in three jobs created in the last quarter are for fewer than 15 hours paid work per work, while more than half of the new jobs created provide fewer than 30 hours a week. “For millions of people in work the downside of generating jobs in a stagnant economy is therefore low hours at low pay and with little prospect of getting a pay rise big enough to keep pace with price inflation,” he wrote in his blog, mini jobs, maximum confusion.
Andrew Sissons, researcher at The Work Foundation, said the figures were encouraging, but reflected the “productivity conundrum”. He said: “While we expect to see a positive growth figure for the last three months, the underlying performance of the economy remains flat. The government must continue to prioritise economic growth, or it will risk further depressing wages and living standards.”
Britain ‘divided’
Shadow work and pensions secretary Liam Byrne said “there are now red flashing lights warning that Britain is becoming a very divided country,” with the welfare bill costing “over £24m over this parliament”.
For millions of people in work the downside of generating jobs in a stagnant economy is therefore low hours at low pay and with little prospect of getting a pay rise big enough to keep pace with price inflation. John Philpott, economist
He added: “Long-term unemployment has risen yet again. The number of young people out of work and claiming benefits for more than a year went up yet again, and three-quarters of Britain has higher unemployment than at the election.”
A TUC report released ahead of the ONS figures found that young black men have been hit hard by unemployment, with more than a quarter of black 16 to 24-year-olds out of work, according to a report.