But latest statistics show drop in number of under-25s in work
The rate of unemployment in the UK has fallen to 7.7 per cent, down from 7.8 per cent in the previous quarter, according to the latest figures from the Office for National Statistics (ONS).
The number of people who were unemployed fell by 24,000 over the three-month period from May to July, to reach 2.49 million. The total number of people claiming Jobseekers Allowance also dropped by 32,600 to 1.40 million – the lowest level since 2009.
Driving these encouraging statistics was impressive growth in employment in the private sector, where the number of people in work rose by 114,000. However, this increase was in stark contrast to the jobs market in the public sector, where employment fell by 34,000.
Economists welcomed another quarter of employment growth, while keeping a watchful eye on the falling rate of joblessness. This is because Bank of England governor Mark Carney has said he will not raise the interest rate until unemployment hits 7 per cent.
CIPD chief economist Mark Beatson said: “These results are in line with the latest CIPD/Success Factors Labour Market Outlook survey, which showed that employers’ recruitment expectations were at their highest level since before the 2008 recession.”
Beatson pointed to other recent surveys offering similarly positive news, such as this week’s Report on Jobs from the Recruitment and Employment Confederation, which showed temporary hiring to be growing at its fastest rate in 15 years. He added: “Jobs growth could even accelerate if the economy is indeed growing more quickly than had been expected.”
Less encouragingly, youth unemployment showed a slight increase. Between May and July, there were 3.6 million 16- to 24-year-olds in employment, down 77,000 on the previous quarter. The number of economically inactive 16- to 24-year olds rose to 2.66 million over the same period, up 53,000.
Commenting on the official statistics, Stephen Gifford, director of economics at the CBI, said: “Encouragingly, jobs growth in the private sector was more than three times greater than losses in the public sector. Despite better news on the direction of travel, youth unemployment is persistently high and growth alone will not address this problem.”
Beatson also offered a word of caution. “There will be few immediate concerns about labour demand increasing inflation,” he explained.
“However, for this situation to continue, those unemployed and outside the labour market need to be able to compete effectively for the jobs available, especially young people and the long-term unemployed. This means focusing skills training on the areas where jobs are becoming available as well as supporting those out of work to look for jobs.”