UK unemployment falls to 2.45m

Unemployment in the UK dipped by 26,000 to 2.45m in the three months to May – the fourth successive monthly fall – but the decline was caused entirely by more young people going into full-time education instead of seeking work. In a mixed set of data, the number of people claiming jobseeker’s allowance rose by 24,500 to 1.52m in June, the largest rise for two years and a higher figure than City economists had been expecting. The main cause this time was not the continuing shift of women from lone parent income support. The claimant count rose by 15,000 for men and 9,500 for women. This was the fourth successive increase in the claimant count, which many economists think is likely to presage higher overall unemployment later this year. Most economists expect some increase in the jobless total as public sector job losses and higher taxes bite, though several have lowered their predictions because the jobs market has held up well so far this year. The unemployment rate was 7.7 per cent of the workforce, down 0.1 percentage point on the quarter. It compares with 9.9 per cent in the eurozone, 9.2 per cent in the US and 4.5 per cent in Japan. The dip in unemployment, as last month, was accounted for by a rise of 35,000 in the number of students in full-time education, many of them not looking for jobs. Unemployment among 16 to 24-year-olds fell by 42,000 to 917,000, or 19.7 per cent of the economically active population in that age group. The number of people in employment rose by 50,000 on the quarter and 309,000 on the previous year to 29.28m. That was a smaller rise than in some recent months. “With the forward-looking measures – such as the number of job vacancies – still weak, we continue to expect employment growth to slow further,” said Vicky Redwood at Capital Economics. Chris Grayling, employment minister, said there were some encouraging signs, particularly the continued rise in private sector employment, but “we do not underestimate the scale of the challenge that we face to help people into employment”. Wage growth remained modest. Average earnings including bonuses rose at an annual 2.3 per cent in the three months to May, up from 2 per cent in the three months to April – the rise was explained by a low figure for February dropping out of the comparison period. Excluding bonuses, the figure was 2.1 per cent, up from 2 per cent. The West Midlands had the biggest fall in unemployment, down 1.2 points on the quarter to a rate of 8.5 per cent. North-east England had the highest rate, down 0.6 points at 9.8 per cent, while the south-east had the lowest, down 0.2 points at 5.7 per cent. Wales’s unemployment was down 0.6 points at 7.9 per cent, Scotland down 0.4 points at 7.6 per cent and Northern Ireland down 0.2 points at 7.1 per cent.