Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Unemployment falls, but young are left on shelf

Economics Editor,Sean O'Grady
Thursday 14 April 2011 00:00 BST

In unexpectedly good news for Government ministers, unemployment fell by 17,000 to 2.48 million in the three months to February, a much lower figure than had been expected. It follows Tuesday's surprise drop in inflation to 4 per cent and warm messages of support to the Treasury from the IMF, in what must rate as the best week for economic news since the coalition took power.

The jobless rate stands at 7.8 per cent, a fall of 0.1 percentage points compared with the previous quarter. The numbers claiming Jobseeker's Allowance was up just 700, to 1.45m.

Nevertheless, the level of unemployment remains high by historic standards, with youth unemployment still at almost 1 million. And, while good news for hard-pressed employers, the retreat in wage settlements to an average increase of 2.2 per cent confirms the squeeze on household finances is, if anything, intensifying.

The absence of a wage-price spiral will encourage the Bank of England to keep interest rates on hold next month. But economists also said the encouraging trend is likely to be reversed in the months ahead, as the public-spending cuts take hold.

Some 140,000 public-sector jobs are at risk this year, according to the Local Government Association; the Office for Budget Responsibility puts the figure at 20,000. Unemployment is likely to rise to between 2.6 million and 2.8 million over the next year, according to the consensus view.

Ministers looking for signs that the private sector will be able to take up the slack and create more jobs will also have been heartened by some of the detail in the latest figures. The total number of people in work rose by 390,000 – the highest yearly gain since early 2008 and well above the pre-recession average.

In another welcome development, the recent trend towards casualisation of the workforce appears to be reversing. Rather than the part-time and temporary jobs that have made up almost the whole of the workforce expansion recently, many more full-time posts are now appearing – another 198,000 on the official figures, the second-highest quarterly gain in the last 20 years.

But the number of public-sector workers fell by 123,000 in the last months of 2010, even before the coalition's cuts began in earnest.

But the young are still, relatively, suffering badly; more than half of the new posts are being filled by workers over the age of 50, and only 8,000 more people under 25 are in work.

Over the past three years, the number of people in work has fallen by 7.7 per cent among the 18 to 24-year-old group – but has risen by 31 per cent among people above the normal retirement age.

Future redundancies in the public sector are also likely to disproportionately affect women, with the preponderance of females in the heath, social care and teaching professions.

Youth unemployment, at 963,000 for 16 to 24-year-olds, is down a little on the figure for the three months to January of 974,000 – but still represents a fifth of young people. The the number of unemployed 16 to 17-year-olds was up by 14,000 to 218,000.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in