The labour market has shown further signs of brightening as unemployment remained stable at 2.67m in the three months to January and public sector job losses slowed.
The data from the Office for National Statistics reinforced other indicators suggesting the UK may escape a double-dip recession. It was the second month in which the jobless data had remained flat, which may ease fears of further large rises later this year.
There was fresh evidence, however, of the growth of “part-time Britain” as a rise of 59,000 people working part-time was accompanied by a drop of 50,000 in those working full-time.
Underlining the market’s continued fragility, Sanofi, the healthcare company, announced the closure of its plant in Fawdon, Newcastle, with the loss of 450 jobs, while UK Coal said it was considering closing Daw Mill mine near Coventry, the country’s biggest, jeopardising 800 jobs.
The jobless total was up 28,000 on the previous quarter, the lowest rise since last May, but down marginally on the October-December figure published last month.
The unemployment rate was unchanged on last month’s release at 8.4 per cent of the workforce, compared with 8.3 per cent in the US and 10.7 per cent in the eurozone.
In the Commons, Nick Clegg, deputy prime minister, said unemployment was not a “problem invented by this government’’, adding that joblessness among women and young people had risen under the Labour administration.
Harriet Harman, Labour deputy leader, countered: “When we left government, unemployment was coming down’’, adding that the coalition’s economic policy was “not only driving up unemployment, it means they will have to borrow more’’.
Many economists still expect unemployment to rise to 2.8m or 2.9m, though Goldman Sachs thinks the rate may level off at 8.5 per cent in the middle of this year.
The public sector lost 37,000 jobs in the quarter to December to reach 5.94m, its lowest level since June 2003. But that was the smallest rise for nine months and outweighed by a rise of 45,000 in the private sector. Most of the decline was in local government, while jobs in the National Health Service rose slightly.
John Philpott, of the Chartered Institute of Personnel and Development, said the data were “mildly encouraging”, but the good news was tempered by the shift to part-time work and very low pay increases, which were squeezing living standards.
Average earnings were just 1.4 per cent higher than a year earlier, a drop of 0.5 percentage points on the previous quarter – partly accounted for by a 23 per cent drop in bonuses in finance and business services in January.
Private sector pay was up by 1.7 per cent, but in the public sector, excluding banks, it was just 0.7 per cent.
The number of people claiming jobseekers’ allowance in February was up by 7,200 on the previous month to 1.61m, the 12th consecutive increase.
Overall employment was up by 9,000 in the three months to January but down 44,000 on a year ago at 29.12m. Andrew Sissons, of The Work Foundation, said: “We need to be creating tens of thousands of jobs every quarter if unemployment is to begin falling.”
The number of unemployed 16- to 24-year-olds was up by 16,000 to 1.04m, or 22.5 per cent of the workforce in that age group.
Women accounted for most of the rise in unemployment over the quarter, but that was because more women entered the labour market rather than fewer being in work. They also accounted for all of the increase in employment.
North-east England had the highest unemployment rate, down 0.9 points at 10.8 per cent, followed by London, up 0.3 points at 10.2 per cent. The lowest rate was in south-west England, down 0.3 points at 6.3 per cent.
Additional reporting by Chris Tighe
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