David Prosser: When will dole queues shorten?

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Outlook Labour isn't working, to borrow a phrase. What's interesting, however, about yesterday's unemployment figures is that joblessness isn't rising anywhere near as quickly as we might have expected. Whisper it quietly, but the deterioration of the employment market may be beginning to slow.

Economists prefer quarterly data to monthly returns, for the very obvious reason that the margin for error is smaller. But to focus on the short term for a moment, yesterday's claimant count figures for May were definitely encouraging. To be precise, May's increase of 39,300 was the lowest such rise since last July.

It may be, of course, that May's figures prove to be a blip – and when school and university leavers swell the figures this summer, you can be certain the pace of decline will pick up once again, if only temporarily.

All the same, there is continuing evidence that many employers are doing what they can to avoid compulsory job losses. British Airways' offer of unpaid work, for example, may not be particularly palatable, but many staff will jump at a period of reduced income if the alternative is to lose their jobs entirely.

Conventional wisdom has it that unemployment begins to fall 18 months to two years after economic recovery begins. That suggests Gordon Brown will be unable to go to the country next spring pointing to a recovery in the jobs market.

Still, had the Prime Minister given in to those on the left of the party, abandoning the labour market reforms Britain has undergone over the past two decades, he would soon be facing an even bigger unemployment headache.

Even so, we need more practical help, particularly for those who have been out of work for the long term. The Local Employment Partnership scheme, expanded earlier this month, is making a difference, but more can be done. Above all, the "neet" figures, announced earlier this week, are the data that should worry us most, revealing, as they do, a sharp increase in the number of 16- to 18-year-olds not in employment, education or training.

This is Labour's lost generation – exactly the wasteful neglect of a sector of society for which Mr Brown once castigated the Conservatives.