Unemployment falls in North West

Iain Duncan Smith.
Iain Duncan Smith.
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Unemployment in the North West fell by 23,000 in the three months to June, official figures have revealed.

But a Lancaster University academic said the levels of wages is ‘dismal’ - with pay growth and bonuses both weakening in all sectors.

Ian Brinkley, chief economist at Lancaster University’s Work Foundation, said: “We have strong employment numbers, a significant drop in unemployment, and a sharp fall in the number of people in part-time jobs who say they would like full-time work, which suggests the recovery is at last making in-roads into under-unemployment.

“But the wage data is dismal. Growth in regular pay - excluding bonuses - measured by weekly average earnings is weakening across all sectors. Bonus pay was down even more.”

The Office for National Statistics (ONS) showed that a total of 243,000 people were unemployed in the region between April and June.

The region’s unemployment rate was 7.0% and saw a fall of 8.7% during the period. The worst area in the UK was the South West which recorded a 10,000 increase in the number of people without a job.

Unemployment has continued to fall in the UK, while the number of people claiming Jobseeker’s Allowance is on course to dip below a million for the first time in six years.

The jobless total was 2.08 million in the quarter to June, down by 132,000 on January to March and the lowest since the end of 2009, giving an unemployment rate of 6.4%.

The claimant count fell for the 21st month in a row in July, by 33,600 to 1.01 million, according to the new data from the Office for National Statistics.

If the trend continues, the number of Jobseeker’s Allowance claimants will fall below a million next month for the first time since September 2008.

The number of self-employed people has reached a record 4.5 million.

Average earnings fell by 0.2% in the year to June, due to an unusually high growth rate a year ago. Excluding bonuses, pay was 0.6% higher than a year ago.

More people are in work - up by 167,000 over the quarter and by 820,000 compared with a year ago,to 30.6 million.

Unemployment has now fallen by 437,000 over the past year, although there was a 15,000 increase in the number of people classed as economically inactive to 8.8 million.

The figure includes students, people looking after a sick relative, taking early retirement or who have given up looking for work.

The number of unemployed 16 to 24-year-olds fell by 102,000 over the quarter to 767,000, more than 200,000 lower than a year ago, the biggest fall since records began in 1992.

Long-term unemployment also fell, with the number out of work for over a year down by 75,000 to 738,000.

Work and Pensions Secretary Iain Duncan Smith said: “The Government’s long-term economic plan to build a stronger economy and a fairer society is working - with employment going up, record drops in youth unemployment and hundreds of thousands of people replacing their signing-on book with a wage packet.”

The Government said youth unemployment has seen the largest annual fall since records began 30 years ago, alongside the steepest annual fall in unemployment in a quarter of a century.

Schemes such as the Work Programme have contributed to the biggest fall in long-term unemployment since 1998, said ministers.

Joe Grice, chief economist at the Office for National Statistics, said: “The headline measure of pay, including bonuses, was 0.2% lower compared with a year earlier. This was partly due to unusually high bonuses in April last year, although underlying pay growth excluding bonuses is also low.”

TUC general secretary Frances O’Grady said: “Self-employment has been responsible for almost half of the rise in employment over the last year. The fact that self-employed workers generally earn less than employees means our pay crisis is even deeper than previously thought, as their pay is not recorded in official figures.

“Falling unemployment is always welcome - particularly for young people who are finally starting to find work - but unless the quality of job creation increases Britain’s living standards crisis will continue and people will be locked out of the benefits of recovery.”

Shadow employment minister Stephen Timms said that while the fall in overall unemployment is welcome, “it’s extremely worrying that the figures have shown pay falling far behind inflation, and the change in regular pay being the lowest ever on record. Millions of working people face a cost-of-living crisis which has left them over £1,600 worse off since 2010.

“A Labour government would extend free childcare provision, freeze gas and electricity bills, raise the minimum wage and build more homes to tackle the cost-of-living crisis. We would also bring in a compulsory jobs guarantee to get the next generation into jobs and tackle the high levels of long-term unemployment.”

John Philpott, director of the Jobs Economist, said: “Even adjusting for the distorting effect of the timing of bonus payments in spring 2013, regular average weekly earnings are increasing more slowly, by only 0.6% year on year, against a backdrop of a 1.9% CPI inflation rate.

“Good news for the jobless is being offset by ever slimmer pickings for those already in work, giving the UK labour market a distinctly bitter-sweet flavour. This doesn’t look like a labour market that needs an interest rate hike to cool it down but instead one where workers appear desperate for a pay hike.”

Adam Corlett, economic analyst at the Resolution Foundation, said: “Once again a strong employment performance is to be welcomed but concerns remain over wages.

“There is still good reason to expect that real pay will start increasing during 2014 but today’s disappointing performance pushes the wages recovery further down the road. It’s now almost impossible for average real pay in 2014 as a whole to exceed last year’s unless we see an unprecedented surge in wages during the rest of the year.”