Unemployment has dropped to its lowest level for almost a year – but Britain's part-time workforce burst through the eight million mark for the first time.
Official figures showed a 46,000 fall in unemployment to 2.56 million in the quarter to June – the lowest since last July despite a worsening double-dip recession for the UK. Jobseekers Allowance claimants also surprisingly fell by 5,900 to 1.59 million.
Politicians welcomed the signs of life in the UK jobs market but the figures also underlined the increasing number of part-time workers, which jumped 71,000 over the quarter to hit 8.07 million – the highest for 20 years. Of these, a record 1.42 million are being forced into part-time work because they are unable to find full-time positions. Youth unemployment also remains above one million with more than one in five seeking work.
While the UK also created 130,000 full-time jobs over the period, experts warned that the part-time trend was likely to continue.
Daniel Solomon, of the Centre for Economics and Business Research, said: "The main forces exerting upward pressure on unemployment have been weak domestic demand as households struggle with their debt burdens and monthly bills, weak public sector demand as the Government looks to reduce the structural deficit, and weak demand from abroad as the eurozone tackles its debt crisis and emerging Asia begins to slow.
"In response to these pressures, there has been a tendency for workers to take up part-time employment."
The figures also showed a pre-Olympic hiring spree flattering the jobs figures as London accounted for virtually all of the 46,000 drop in unemployment. The number of people in work increased by 201,000 to almost 30 million, the highest since last summer, with half of that rise coming in London. Wages are still lagging behind the cost of living however as average earnings increased by 1.6 per cent in the year to June – half the current 3.2 per cent rate of inflation.
The jobs figures gave a political boost to a coalition under intense pressure over its economic strategy. The Work and Pensions Secretary, Iain Duncan Smith, said: "These are positive, encouraging figures demonstrating the strength of our private sector – notwithstanding the difficult economic times, it is still creating jobs, the vast majority of which are full time." An apparently buoyant jobs market also contrasts with official estimates showing a deepening of the UK's double-dip recession between April and June. This has led some experts to cast doubt over the growth figures.
Vicky Redwood, chief UK economist at Capital Economics, said: "The labour market remains remarkably resilient. But we doubt this will last with the economy back in recession."
Dave Prentis, general secretary of Unison, warned: "This small fall is welcome, but there will be no lasting Olympics legacy in the jobs market."
Case study: 'This way it's easier to hunt for the next job'
Laura Greig, 25, from Denmead in Hampshire
"I am working part time at a books-and-craft shop, while I try to find full-time employment as a youth worker, or in a related area. I studied social sciences at Brighton University, graduating in 2008, then took a postgraduate diploma in careers guidance in 2010. I was hoping to get work at Connexions youth-advice service, but the Government cut the service and I missed the opportunity. My employers are good to me and working part time allows me to do voluntary work and go to interviews in the hunt for full-time employment. Recently I've been doing voluntary work for the National Citizen Service in Winchester – so that might lead to a permanent position. I hope so; it's getting frustrating".