The number of people out of work has fallen by the largest amount in over a decade, official statistics show.
The figures reveal that unemployment fell by 82,000 in the three months to October to 2.51 million – down 128,000 on a year ago. This represents the biggest quarterly fall since the spring of 2001. Employment also rose by 40,000 to 29.6 million, up by half a million on a year ago.
However other data released by the Office for National Statistics complicated the picture, pointing to rising unemployment over the past two months and showing that the strong increases in employment seen since this summer are now petering out.
On the first set of figures, private sector employment rose by 65,000 to 23.8 million. This offset the twelfth consecutive quarterly fall in public sector employment, which declined by 24,000 to 5.7 million, the lowest since 2002. Employment in the civil service was cut by 3,000 to 455,000, the lowest since records began in 1999, while local government employment also fell to a record low of 2.5 million after a cut of 32,000.
The employment minister Mark Hoban welcomed the news saying: “Once again, these figures show that the private sector is creating far more jobs than are being lost in the public sector. It’s a credit to British businesses that they’re proving wrong those cynics who claimed the private sector wouldn’t be able to step up.”
Yet a separate labour market survey by the ONS, which reports on monthly rather than quarterly movements in the jobs market, told a different story. It suggested that employment fell by 11,000 to 28.5 million in October. Meanwhile, the number of unemployed rose by 112,000 over the month to 2.57 million, following a 29,000 rise in September. According to this series, the unemployment rate has crept up over the past three months to 8.2 per cent, rather than falling to 7.8 per cent as the main ONS release suggested.
The ONS’s monthly series is not classified as official national statistics because it draws from a smaller sample of respondents than the main quarterly survey and is deemed more volatile. But some economists feel that the image presented by the monthly figures is actually closer to a true picture of what is taking place in the UK jobs market.
John Zhu of HSBC said that with wages still rising slower than prices and a host of important economic surveys showing a deterioration since October, the jobs market was likely to weaken in the New Year. “Growth in employment and jobs is losing momentum. And nominal wage growth continues to be much weaker than inflation. With surveys still suggesting jobs cuts, the falls in unemployment may soon reverse” he said.
”The latest UK labour market figures contain further signs that jobs growth is slowing” said Vicky Redwood of Capital Economics. “Although the Labour Force Survey measure of employment rose by 40,000 in the three months to October, this was the smallest increase since the start of the year.”
Total pay rose 1.8 per cent over the same period of last year, but that is less than the annual rate of inflation which presently stands at 2.7 per cent, implying that employees are still experiencing real terms pay cuts.
A large proportion of the new jobs created since the 2008-09 recession have been part-time. But the figures showed a 4,000 fall in part-time employment.
The number of people claiming Jobseeker’s Allowance fell by 3,000 in November to 1.58 million, following two monthly increases. Last week the Chancellor’s official forecaster, the Office for Budget Responsibility, predicted that the claimant count will rise to 1.66 million in 2013, before peaking at 1.69 million in 2014.