UK unemployment fell by 36,000 in the three months to the end of March to 2.46m, according to figures from the Office for National Statistics (ONS).

The rate of unemployment in the UK now stands at 7.7%. However, unemployment among 16-24-year-olds is 935,000, with one in five (20%) young people now out of work.

Gillian Econopouly, head of policy at the Recruitment & Employment Confederation, says: “We cannot lose sight of the fact that the jobs market remains volatile.

“Our latest ‘Report on Jobs’ (see yesterday’s recruiter.co.uk) shows that while hiring activity in certain sectors is steadily increasing, there is still concern over the effects of public sector cuts and the creation of a two speed jobs market.

“Employer confidence is on the rise, which gives some optimism for how the employment landscape will develop over the coming months. However, the ability of the private sector to fully absorb public sector job losses remains in the balance.”

Ian Brinkley, director of socio-economic programmes at The Work Foundation, says: “Young people in particular are still facing tough conditions. There is little sign of a significant recovery in the employment for those under 25. Employers looking to hire may be going for experience over youth.”

However, he maintains that the figures were “much better than expected given the apparent lack of growth in the economy”.

Tom Lovell, group managing director of specialist recruitment consultancy Reed, says: “Now the cluster of bank holidays is out of the way we expect to see an increase in job opportunities as organisations look to fill any gaps before the summer holiday season gets into full swing.

“April did see an upturn in the temporary jobs market, with Reed seeing a 9% year-on-year increase in the number of temporary workers placed in April 2011 compared to April 2010.

“We have also seen some sectors perform particularly well in April, with the number of interviews arranged in technology, hospitality and education sectors all up on the same period last year.”

Per Larsen, director of group buying website for small businesses Huddlebuy.co.uk, says the latest figures could be the calm before the storm. “Although the focus seems to be on youth unemployment, the real worry is the public sector time bomb.

“The government has talked up the private sector coming to the rescue and taking up the slack from the public sector, but the reality is that private businesses have a less than glowing opinion of public sector workers.

“Two thirds of the companies we surveyed said they would be more inclined to employ from the private sector rather than the public sector and three quarters of those polled said that public sector employees have a reputation, whether deserved or not, for being less dynamic and driven than the private sector. The reality is that former public sector employees could face a tough time finding new jobs.”

This view is echoed by Nigel Meager, director of the Institute for Employment Studies: “The latest official employment figures provide further confirmation that the recovery in the UK labour market is faltering and somewhat anaemic.

“The worse news is that big public sector job cuts will shortly pull out the bath plug, and overall employment levels may well fall again.”

Meager believes the UK is faring worse than many other countries. “It’s now over three years since the start of the recession and we’ve yet to see a substantial fall in unemployment or sustained growth in employment… although we entered recession before most other countries, by early 2011 the UK unemployment total had fallen only 2% from its peak, compared with falls of 4% in France and Italy, 11% in the US and Japan, and 18% in Germany.”