Employment has its best quarter for 22 months

Ben Southwood
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UNEMPLOYMENT plummeted in the three months to May, while employment grew healthily, according to data released by the Office for National Statistics (ONS) yesterday.

Unemployment was down 65,000 or 0.2 per cent, and stood at 8.1 per cent, while employment flew up by 181,000, the largest quarterly increase for 22 months.

Though employment is still 218,000 below its pre-recession peak, the falls in unemployment and economic inactivity – which dipped 61,000 to 9.21m – are encouraging figures, suggesting real recovery since late last year. But analysts warned that the trend may not continue if indicators for June and July, which have indicated slowdown, are believed.

“Looking ahead, it may be difficult to sustain the downward trend in unemployment. Recent activity indicators have been sluggish, implying that the private sector will find it increasingly difficult to create jobs,” said Nida Ali at Ernst & Young’s Item club.

Meanwhile, John Walker of the Federation of Small Businesses pointed to rising long-term unemployment figures, and Brendan Barber of the Trades Union Congress (TUC) warned that youth employment had risen.

Nominal pay was up on the quarter, by 1.5 per cent for both the public and private sector, though public sector workers were paid more – on average £480 per week compared to the £466 per week private sector workers received.

Public sector workers nevertheless drove the worst 12 months for labour relations since the year to January 1991, with 1.47m days lost due to strike action, including 997,000 in November last year.