Unemployment rise continues

17-08-2006

The rising trend in Britain's unemployment levels continued in June as the percentage of jobless rose 0.3 per cent to 5.5 per cent, the Office of National Statistics (ONS) has confirmed.

In total 92,000 more people were unemployed in the three months to June, although overall employed numbers also rose by 42,000 compared to figures for the three months prior to May.

Lying behind these figures is a pronounced shift in the gender working balance. While the employment rate among women has fluctuated in the last two years but has remained relatively high, the male employment rate has dropped by around one per cent in the last two years.

Although the number of redundancies fell, the working age inactivity rate fell, leading some to suggest that the overall trend in the labour market remains too small to hold any real significance.

The government, publishing its own labour market statistics today, has highlighted high employment rates, arguing that unemployment rises are caused by "a growing population and a fall in the number of people who are not looking for work".

Jim Murphy, minister for employment and welfare reform, has compared today's high employment rate of 28.94 million with the high levels of unemployment reached under Margaret Thatcher's reforms of the 1980s.

"20 years ago claimant unemployment hit a post-war high... since then employment is up by four million to a new record and claimant unemployment is down from over three million to less than one million," Mr Murphy said.

"Because of the New Deal and the end of boom and bust, there are now fewer claimant unemployed in total than there were long-term unemployed 20 years ago, and youth long-term claimant unemployment is a thing of the past."

Despite this, the ONS unemployment rate has steadily risen from around 4.5 per cent one year ago to 5.5 per cent today – and looks like accelerating further in the future.

Howard Archer, economic analyst at research firm Global Insight, warned that rises in both employment and unemployment showed that "the economy is still not generating enough jobs to meet the expanding labour force".


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