Jobless figures drop as students opt out

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The Independent Online

A fall of 88,000 in the headline unemployment figure for the three months to April was largely driven by students leaving the jobs market, official figures showed yesterday. However, there has still been a substantial increase in the creation of private-sector jobs, suggesting that, for now at least, this "rebalancing" in the labour market will be able to compensate for sackings in the public sector.

The drop leaves the jobless total at 2.43 million, some 57,000 lower than this time last year, the Office for National Statistics said yesterday. It was the biggest fall since August 2000, and leaves the unemployment rate at 7.7 per cent of the total workforce, 0.3 percentage points lower.

However, the ONS said, some 61,000 of those 88,000 are accounted for by students becoming "economically inactive", that is studying and not seeking part-time or casual employment to supplement their income. Such movements also explain the marked fall in youth unemployment this month, down by 79,000 to 895,000.

In terms of the claimant count – which excludes those ineligible for job seekers allowance – there was a rise, by 19,600 to 1.49 million.

This divergence can be explained by two factors. First, it is a more recent figure than the headline rate, and may reflect a weakening in the jobs market in the last few weeks.

Second, it has been distorted by a number of benefit rule changes, especially those pushing single mothers on to job seekers allowance, and thus the claimant count, rather than single parent benefit. The number of single parents claiming job seekers allowance who have children between seven and nine – those most affected by the reforms – has soared from 2,175 last April to 44,875 now, for example.

Leaving aside temporary staff taken on for the 2011 census, employment in the public sector declined by 39,000 in the last three months, compared with an expansion in private-sector employment of 104,000.

Since this time last year the public sector has lost 158,000 staff and the private sector added 520,000 jobs, an encouraging sign for ministers anxious to see such progress, though the pace of private job creation is slowing. And, in a reversal of recent trends, most of the private sector's new jobs are permanent rather than temporary or part-time.

Wage growth at 2 per cent remained subdued, and the number of days lost to strikes close to its lowest since records began in 1931.