Tiny drop in unemployment sparks job market fears

Experts warned the UK jobs market was "on the turn" today after official figures showed a lower-than-expected drop in unemployment.

The paltry decline in the number of jobless - down 8,000 in the three months to July to 2.47 million - overshadowed a record surge in employment.



A surprise increase in the closely-watched Jobseeker's Allowance claimant count also reinforced fears of a relapse in the jobs recovery.



Data from the Office for National Statistics (ONS) revealed 2,300 more people joined the dole queue last month, taking the total to 1.47 million - the first increase since January.



Economists said the figures cast doubts over whether the private sector was strong enough to compensate for the 600,000 jobs expected to go over the next five years under the Government's imminent spending review.



Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club, said: "The August rise in the claimant count, while small, was the first increase for seven months and provides further evidence that the labour market is on the turn.



"This is particularly concerning given that this comes before the public spending cuts have really got under way."



While the ONS figures showed the largest rise in employment since records began in the three months to July, much of this rise was accounted for by students taking on part-time work rather than those on benefits finding jobs.



The ONS said the number of employed workers soared by 286,000 to 29.2 million, although this had little impact on the level of unemployment. The rate of unemployment stayed static at 7.8%.



Those in part-time work increased by 166,000 quarter-on-quarter to 7.9 million in the three months to July suggesting many are still struggling to secure full-time work.



However, the number of full-time workers also increased, by 121,000 to 21.2 million.



Full-time students in employment rose by 47,000 in the three months to July, while students classed as economically inactive fell by 62,000.



Vicky Redwood of Capital Economics said "cracks are appearing in the recovery".



"Even if the labour market holds up in the near-term, this is unlikely to last once the public sector job cuts start in earnest," she added.



The Government will announce its spending review next month in what is expected to deal a devastating blow to the public sector workforce.



It is hoped the private sector will pick up the slack, but today's mixed figures have shown a fragile jobs recovery.



The administration of social housing firm Connaught last week, which has caused 1,100 redundancies so far, has already highlighted the knock-on effect of the spending cuts on the private sector.



The number of long-term unemployed is another worry, with those out of work for more than 12 months up 16,000 to 797,000 in the three months to July, according to the ONS.



Older workers out of a job for more than two years rose sharply again, up 15% quarter-on-quarter in the three months to July, which is likely to spark further concerns over prospects for over-50s jobseekers.



There was some modest good news on wages in the data, which showed a 1.5% rise in pay in the year to July, up from 1.3% previously.



Employment minister Chris Grayling said: "Today's jump in employment, driven by the private sector, is good news but it doesn't disguise the fact that the system the Government inherited is failing to get people on welfare into these jobs.



"It is neither fair for the nearly five million people on benefits, nor the taxpayer who supports them."



Most economists are predicting unemployment will start to rise again by the end of the year and throughout 2011.



Economist Howard Archer, of IHS Global Insight, forecasts the number of jobless will peak at 2.85 million in the first half of 2012, with the unemployment rate reaching 9%.



Brendan Barber, general secretary of the TUC, which is holding its annual conference today, said: "What is clear is that the economy is still extremely fragile."



"The best the Government can expect is a largely jobless recovery. At worst the economy could go into reverse."

News
Jennifer Lawrence was among the stars allegedly hacked
peopleActress and 100 others on 'master list' after massive hack
Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
people'It can last and it's terrifying'
Voices
A man shoots at targets depicting a portrait of Russian President Vladimir Putin, in a shooting range in the center of the western Ukrainian city of Lviv
voicesIt's cowardice to pretend this is anything other than an invasion
News
i100
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
Arts and Entertainment
The eyes have it: Kate Bush
music
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Senior Asset Manager

£70000 - £75000 Per Annum: The Green Recruitment Company: Katie Robinson +44 (...

IT Support Analyst (2nd Line Support) - City, London

£28000 - £30000 per annum + Pension, Healthcare: Ashdown Group: IT Support Ana...

KS1 Teacher

£90 - £120 per day: Randstad Education Leicester: KS1 Teaching Specialist Leic...

Y3 Teacher - Loughborough

£90 - £120 per day: Randstad Education Leicester: Are you a Key Stage 2 specia...

Day In a Page

Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor