Jobs outlook 'deteriorating' Government warned

The Government has been warned that the outlook for jobs is "deteriorating" after new figures showed the biggest monthly rise in the dole queue for two years.

A total of 1.52 million people were claiming Jobseeker's Allowance (JSA) last month, a monthly rise of 24,500 and the biggest monthly leap since May 2009.

Employment minister Chris Grayling said there were some "encouraging signs" in the labour market figures, including a fall in unemployment and a continued rise in private sector employment.

But both sides of industry voiced concerns, with the TUC warning of "worrying signs", including a big jump in the ratio of unemployed people to job vacancies.

Data from the Office for National Statistics also revealed a record number of people working part-time because they could not find a full-time job.

The number of women on JSA increased by 9,500 to 493,900, the highest figure since 1996, while women were also affected most by a 16,000 increase in redundancies in the quarter to May to 144,000, mainly in health and social services.

The total unemployment figure, including those not eligible for JSA, fell by 26,000 in the latest quarter to 2.45 million, although those out of work for up to a year increased by 11,000.

Mr Grayling said: "It's really important that we continue to support the economy and encourage businesses to invest and create jobs.

"However, we do not underestimate the scale of the challenge that we face to help people into employment. We always said that the road to recovery would be choppy."

TUC general secretary Brendan Barber said: "Employment rates are falling around the UK and there are parts of London and Scotland where around 30 dole claimants are chasing every vacancy - and in Haringey there are 39 people after every available job."

Unite general secretary Len McCluskey said: "When you look behind the headline figures, record numbers of people are in insecure, part-time work and women's employment prospects have gone back 15 years to the dying days of the last Tory government."

David Kern, chief economist at the British Chambers of Commerce, said: "The private sector is willing and able to create jobs, but we must not be complacent.

"It is likely we will see more public sector job cuts in the coming months, and we are expecting unemployment to increase by 150,000 to a peak of 2.6 million over the next 12 to 15 months.

"Given this background, the Government must empower the private sector to create jobs by reducing the burden of regulation, particularly on smaller firms."

Dr John Philpott, chief economic adviser at the Chartered Institute of Personnel and Development, said: "Today's figures suggest that conditions in the labour market are weaker than earlier in the year.

"The headline improvement in employment and unemployment is relatively small and, with vacancies continuing to fall and redundancies now starting to increase as public sector cutbacks begin to bite, it's clear that the underlying jobs situation is deteriorating."

Figures also revealed a 32,000 increase in people classed as economically inactive, to 9.33 million, mainly due to a 41,000 rise in the number of students not active in the labour market to reach 2.27 million.

The number of people in work increased by 50,000 to 29.28 million, 293,000 lower than the pre-recession peak.

The number of people working part-time because they could not find a full-time job increased by 80,000 to 1.25 million, the highest figure since records began in 1992.

Average earnings increased by 2.3% in the year to May, up by 0.3% over the previous month, with weekly wages now averaging £461.