Jobless total falls to two-year low: Analysts welcome rise in JobCentre vacancies, though new notifications fall

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The Independent Online
THE NUMBER of people unemployed and claiming benefit dropped unexpectedly sharply last month, with the total falling by 36,800 to 2,682,500, its lowest in two years. But this may overstate the improvement.

The Department of Employment said that the jobless total was dropping at a trend rate of 25,000- 30,000 a month, slightly more quickly than it estimated last month. Unemployment fell in every region of the country except Northern Ireland and now totals 9.5 per cent of the workforce.

City analysts also took heart from a 5,300 rise in vacancies notified to JobCentres, arguing this and the fall in the headline jobless total pointed to improving labour market conditions. But the rise in vacancies masked sharp falls in both the number of new vacancies notified and the number filled.

The Employment Department also reported that manufacturers shed 12,000 jobs in March, the biggest shakeout since September. Firms have stripped out more than 200,000 jobs since the end of the recession despite rises in output. However, overtime in manufacturing in March was at its highest since July while the length of the working week rose sharply.

The jobs created since the recession have been dominated by part- time work for women in service industries. Economists fear these jobs would prove vulnerable if tax increases inflicted serious damage on the pace of recovery.

The department also reported that the number of people unemployed for a year or more dropped by 36,300 between January and April to a 15-month low of 1,045,600. The number unemployed for six months also fell.

David Hunt, the Employment Secretary, said he was particularly pleased that the largest falls in unemployment were among 18- to 24- year-olds.

The jobless total for this group has fallen by more than 8 per cent in the past three months to just under 725,000, although unemployment among middle-aged men remains above the high it reached in the mid-Eighties.

But John Prescott, shadow employment secretary, said it was 'simply untrue' that unemployment had fallen.

He said: 'What is happening is that many people are losing their rights to unemployment benefits, are not finding jobs and are joining the huge army of the missing millions who want a job but are kept off the official figures.'

(Graphic omitted)