Brown hails record jobs figures despite public sector setback

The Prime Minister told the Commons yesterday that the latest unemployment figures were the "best in history", with record numbers in work and the highest number of jobs yet in the economy. However, most economists noted that they were rather a testament to the past strength of the economy than a leading indicator of future bullish prospects.

The Office for National Statistics said the number of people claiming Jobseeker's Allowance fell by 11,100 in November to 813,000, the lowest since 1975 and the 14th consecutive monthly reduction. Unemployment, including those not claiming benefits, fell by 15,000 in the quarter to October to 1.64 million, the lowest for more than a year. Employment levels increased to 29 million, the highest figure since records began in 1971. The total number of jobs in the UK also reached a record high of more than 31 million.

Chris Ball, the chief executive of the Age and Employment Network, said the figures represented a "good news, bad news" story, adding: "The number of people above state pension age who are working has increased by 72,000 over the past year, which means they are responsible for nearly one third of the increase in employment over that period. This means there are more than 1.25 million pensioners.

"However, we estimate that there are many more perhaps double the present number who want, or need to work. Unfortunately, they are prevented from doing so by employer attitudes."

The jobs growth was mostly in the private service sector. Public sector employment decreased by 15,000 in the third quarter and manufacturing jobs continued to fall, to 2.9 million, the lowest since comparable records began in 1978.

The higher numbers returning to the labour market, the effects of migration and the trend towards globalisation helped keep income growth restrained. Average earnings rose by 4 per cent in the year to October, down by 0.1 per cent compared with the previous month. Thus, earnings growth remains below the 4 to 5 per cent range the Bank of England has indicated is consistent with its inflation target. Yesterday's data suggests the labour market is not a major constraint on further interest rate cuts.

Thanks to strike action at the Post Office, there was a substantial increase in the number of working days lost through industrial disputes, at 327,000 in October, the highest monthly total for more than a year.