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17 October 2012

Good news on unemployment – but will it last?

Unemployment has fallen to 7.9 per cent - but it's expected to rise next year.

By George Eaton

Ahead of the first PMQs since the conference season, the latest employment figures offer a much-needed boost for David Cameron. Unemployment fell from 8.1 per cent to 7.9 per cent (or from 2.58m to 2.53m) over the last quarter, the lowest level since May 2011, while employment rose by 212,000 to 29.6 million, the highest level ever recorded. Similarly encouraging is the news that, for the first time in a year, youth unemployment is back below a million – it fell 62,000 to 957,000 (or from 21.8 per cent to 20.5 per cent) .

However, it’s worth noting that 59 per cent (125,000) of the 212,000 new jobs created are part-time and that London was responsible for nearly half (101,000) of the rise in employment (a total of 1.4 million people are working part-time because they can’t find full-time jobs), suggesting that the labour market received a temporary boost from the Olympics. The jobless rate rose by 0.2 per cent in Scotland and by 1.2 per cent in Northern Ireland. In addition, 6 per cent (13,000) of the 212,000 jobs are on “government supported training and employment programmes”. In the last year, the number of people on these programs has risen by 89 per cent.

In addition, as I’ve pointed out before, unemployment is expected to rise next year to 2.7m owing to further spending cuts, a lack of growth, and rising productivity. For now, however, Cameron can promote a narrative of recovery.

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