Unemployment drops to lowest level in a year

Unemployment fell to its lowest level for almost a year between April and June, according to the Office for National Statistics.

Wed, 15 Aug 2012

Unemployment fell to its lowest level for almost a year between April and June, according to the Office for National Statistics.

Despite the UK being officially in recession, unemployment fell by 46,000 to 2.56m between April and June. The figures show there were an extra 201,000 people in work compared with the previous quarter, with 130,000 of them in full-time jobs.

The number of 16 to 24-year-olds in work rose by 40,000 compared with the previous quarter.

Since April 2010, 634,000 more people are in employment, over half a million of these outside London.

Commenting on the figures, work and pensions secretary Iain Duncan Smith says: “These are positive and encouraging figures, demonstrating the strength of our private sector. Notwithstanding the difficult economic times it is still creating jobs, the majority of which are full-time. Unemployment is falling and the claimant count is down.”

Shadow work and pensions secretary Liam Byrne says: “It looks like about 90% of the fall in unemployment has been in London, where there has obviously been a boost from the Olympics.

“In about half of Britain’s regions unemployment is going up. I think the government needs to act now to put a lot more fuel in the tank of its ‘back to work’ programmes before things get any worse.”

Ian Brinkley, director at The Work Foundation, adds: “These figures are good and almost impossible to explain. The economy has been contracting for at least six months, according to the official statistics. Yet the private sector is still hiring people in large numbers.

“Moreover, many of the new jobs are full-time and permanent. If we were just looking at the labour market, we would say the UK is on track for a recovery rather than being in the double-dip recession shown by the GDP figures.”

Emilie Bennetts, Associate at Charles Russell LLP, adds: “With indications that many businesses in the private sector are maintaining higher staffing levels than their output levels require, the labour market remains indisputably shaky.”  

Meanwhile, a survey by talent and career management company Right Management, part of Manpower Group, suggests companies are not planning to shed staff during the remainder of 2012.

According to the survey, 81% of companies are not planning any redundancies in the next six months, with just 4% saying there would be significant cutbacks. 

Among the other findings, 41% say they do not do workforce planning and have no workforce strategy and 23% state that HR plays little or no role in business strategy.

“Companies appear to be staying resilient in the face of tough economic conditions and retaining staff, which is reassuring,” says David Miller, managing director of Right Management UK & Ireland. “However, this may be due to many companies having already made cuts and now operating in a stretched capacity. 

“So while it is concerning to see the majority surveyed stating they lacked a workforce strategy, in our experience many companies are being more agile about how they use their people’s skills and knowledge but just don’t recognise this as workforce planning.”

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