Benefit claims drop, yet jobs market slows

 
Julian Harris
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UNEMPLOYMENT benefit claims fell by 4,100 between November and December to hit their lowest number for 21 months, official data revealed yesterday.

The claimant count dropped by almost 10 per cent over the course of last year, according to the Office of National Statistics (ONS).

“This was its third monthly drop in a row, despite the fact that snow would have hampered job hunting,” said Vicky Redwood of Capital Economics.

However, the overall jobs market stagnated or declined, according to other data released by the ONS.

Total employment fell in the three months to November, while unemployment edged upwards, by 49,000.

The rise pushed the unemployment rate to 7.9 per cent, the same rate as that measured earlier in the year, in the three months to February.

In the summer unemployment was predicted to average 8.1 per cent in 2010, according to the government’s independent fiscal watchdog – but

as the economic situation improved, the forecast was revised down to

7.9 per cent.

The Office of Budget Responsibility (OBR) forecast unemployment would edge up slightly to eight per cent this year, before falling as low as 6.1 per cent by 2015.

“We expect private sector job creation to more than offset falling public sector employment – just as it did during the fiscal consolidation of the 1990s,” the OBR said.

Government sector employment fell by 33,000 in the three months to September, yet remained above six million – some 211,000 higher than it stood in September 2008.

Yesterday’s figures also reveal a shift from full time to part time work.

Although both part time and full time employment fell, “part time workers now account for 27.3 per cent of total employment, up from 25.7 per cent at the end of 2008,” said Howard Archer of IHS Global Insight.

The number of people working part time because they could not find a full time job increased by 26,000, the ONS said, totalling 1.16m – the highest figure since comparable records began in 1992.

For 16 to 24 year olds, unemployment jumped by a percentage point to reach 20.3 per cent.