Unemployment rises for second month in a row

12 Aug 15

Unemployment has crept up for the second month running, with 25,000 more people out of work over the three months to June, compared with the first quarter of the year.

Last month, the first rise in unemployment was recorded for more than two years.

However, unemployment numbers were still well down on a year ago, when 221,000 more people were jobless.

Labour market figures published by the Office for National Statistics today showed that the overall unemployment rate was unchanged at 5.6%, and considerably lower than a year ago when it was 6.3%.

A total of 1.85 million people were unemployed, of whom 1.01 million were men, 130,000 fewer than a year earlier. There were 838,000 unemployed women, 92,000 fewer than a year earlier.

Pay rates continues to improve. Between April and June pay was up 2.4% on the preceding year, and up 2.8% once bonuses were excluded.

Commenting on the figures, work and pensions secretary Iain Duncan Smith said: “Thanks to our long term economic plan we have already seen 2 million more people in jobs since 2010.

“I was particularly pleased to see that wages are continuing to rise – meaning that hardworking people will see a real difference in their pay packets.”

The Resolution Foundation said the pay recovery looked set to continue throughout the year, helped along by low inflation.

“But with average earnings having only recovered to their August 2004 level, there is still a huge amount of ground to make up,” said chief economist Matthew Whittaker.

“We’re seeing some significant differences in pay growth across the sectors. Most obviously private sector pay is rising much more rapidly than public, but it’s encouraging to see growth of 4% in the low-paying retail sector. However, manufacturing pay growth stands at just 1.3%, well short of the 4.3% recorded in the finance sector.

“It’s a concern that the employment recovery isn’t doing more to boost the pace at which people move jobs. This needs to increase before we can expect to see strong real wage growth over the medium term.”

Responding to the figures, the Centre for Economics and Business Research said that the figures were mixed.

Economist Alasdair Cavalla added: “The slowing of hiring is in line with firms’ hiring intentions as shown by various business surveys. However, there is progress towards more stable employment conditions. Self-employment was down on the year, and the numbers of part-time workers and those working part-time because they could not find a full-time job both fell compared to their previous values.

“The unemployment rate is now no lower than its level in January, suggesting that the great job recovery is running out of steam. With no meaningful rise in workers’ output per hour, but wages back on the rise, it is no longer a no-brainer for companies to expand workforces.“
 

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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