Unemployment has fallen by 20,000, but the number of people out of work for longer than a year has risen to its highest total in 13 years, new figures showed today.
The numbers claiming Jobseeker's Allowance increased by 5,300 in September to 1.47 million, the second consecutive monthly rise, according to the Office for National Statistics.
Total unemployment, including those not eligible for benefit, fell to 2.45 million in the three months to August, the lowest so far this year.
This was almost entirely due to 16 and 17-year-olds finding work, training or education.
Female unemployment increased by 36,000 over the latest quarter to just over a million, while the number of vacancies across the economy was 30,000 down in the three months to September to 459,000, the biggest quarterly reduction since the start of 2009.
The number of people out of work for over a year was 821,000 in the quarter to August, up by 27,000 from the previous three months, reaching the highest total since early 1997.
Jobless 18 to 24-year-olds increased by 35,000 to 742,000, the highest for a year.
Meanwhile, the number of people in work increased by 178,000 to 29.16 million, the best figure for a year.
Employment is up by 241,000 on the year but is still 270,000 lower than before the start of the recession.
The latest unemployment rate is 7.7%, a fall of 0.1% on the quarter, while the claimant count rate remained at 4.5%.
There were 9.28 million people classed as economically inactive in the quarter to August, down by 66,000, largely because of a fall in the number of students counted in the figure.
The number of workers in part-time jobs reached a record high of almost eight million, while self-employment also grew to a new record of almost four million.
Average earnings increased by 1.7% in the year to August, up by 0.4% on the previous month, giving average weekly earnings of £451.
Employment minister Chris Grayling said: "Another rise in employment is a step in the right direction but clearly our priority is to get the economy motoring again, reduce the deficit and make the UK an attractive place for investment to encourage growth.
"We are pressing ahead with radically overhauling the welfare system, with reassessments of those on incapacity benefits in Burnley and Aberdeen beginning this week.
From early next year our Work Programme will come into force to ensure that long-term unemployed people and others who need it have tailored support to move them into sustained work."
The Government said the UK economy still faced "significant challenges" ahead and it must continue to tackle the deficit and create an environment where businesses can flourish and create jobs.
The increase in the number claiming Jobseeker's Allowance this month showed that the Government was right to press ahead with its new Work Programme, said Mr Grayling.
Unemployment in the regions between June and August was:
Region Total unemployed Change on quarter Unemployment rate
North East 116,000 minus 5,000 9%
North West 277,000 minus 8,000 8%
Yorkshire/Humber 247,000 plus 1,000 9.3%
East Midlands 171,000 plus 5,000 7.5%
West Midlands 216,000 minus 14,000 8%
East 203,000 plus 4,000 6.8%
London 377,000 minus 6,000 9.1%
South East 282,000 plus 15,000 6.3%
South West 153,000 minus 14,000 5.7%
Wales 118,000 minus 12,000 8.2%
Scotland 231,000 plus 13,000 8.6%
N Ireland 58,000 unchanged 7%
Vicky Redwood, senior economist at Capital Economics, said the figures provided further evidence that the labour market recovery is faltering, even before the public sector job cuts begin.
She said: "The 5,300 rise in claimant count unemployment in September was the second monthly increase in a row and, although small, suggests that the trend has turned.
"Admittedly, employment still rose strongly, by 178,000 in the three months to August. But this was a smaller rise than in the previous couple of months and the more forward-looking employment surveys have by and large been weakening."
Howard Archer, chief UK and European economist at IHS Global Insight, said he also expected a deteriorating trend to emerge.
"We suspect that unemployment is headed up over the coming months as a consequence of slower, below-trend growth, rising business caution and public sector jobs being increasingly pared.
"Specifically, we see unemployment on the ILO measure peaking around 2.85 million in the first half of 2012, with the unemployment rate reaching 9%," he said.Reuse content