'Not that bleak': Minister upbeat after unemployment drops 0.2%

Unemployment figures show an improvement for another month
Unemployment figures show an improvement for another month
Alex Stevenson By

The number of those out of work has dropped again, prompting an upbeat assessment of Britain's economic prospects from the coalition.

Employment minister Chris Grayling said the bleak mood caused by the double-dip recession was not reflected in the "reality" of employment statistics, which today showed a 0.2% drop in the unemployment rate to 8.1%.

Between March and May this year there was a drop of 65,000 in the quarter to a total of 2.58 million.

"I'm encouraged in what are difficult times economically that we're seeing improvements across the board… that has to be good news," Grayling said.

"The picture in the economy in the whole is not as bleak as some people have suggested. These are difficult times, but the reality is out there, people are still moving into employment, employers are still taking on new staff."

The Office for National Statistics said the claimant count had increased in June by 6,000 to 1.6 million.

Youth unemployment was down in March, April and May by 10,000 to under 1.02 million, but this was mainly due to increased numbers entering full-time studying.

The number of 16- to 24-year-olds out of work rose by 16,000 on the previous three months among those not studying.

Economic analysts greeted the news of falling unemployment with disbelief.

"The labour market continues to defy the laws of economic gravity, with employment up and unemployment down, despite stalling growth forecasts and stuttering confidence," Gerwyn Davies of the Chartered Institute of Personnel and Development said.

Falling productivity and subdued pay are affecting the competitiveness of employers and the living standards of their employees, he added. Total pay between March and May rose by 1.5% on a year earlier, today's figure sshowed.

Davies added: "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."

John Salt, director of the jobs site totaljobs.com, agreed that the ONS' stats were "a little unexpected" given poor business confidence, bad weather and bank holidays and tepid consumer spending.
"Whilst the picture has been improving of late, my concern is that the latest cohort of graduates are going to be entering the labour market, if they haven't already, followed soon by school leavers," he commented.

"Today's figures, whilst welcome, do not point to the significant rise in vacancies that we'd need to off-set this increase in the number of jobseekers."

An IPPR study released today revealed unemployment in the north of England had increased by nearly 100,000 in the last 12 months.

Shadow work and pensions secretary Liam Byrne commented: "Ministers must change course, and they should start by putting in place Labour's real jobs guarantee for young people, funded by a tax on bankers' bonuses." 


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