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Number of unemployed fell by 3,000 in last quarter of 2009

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The number of people unemployed in the UK has fallen, according to the Office for National Statistics.

The official statistics show total unemployment stood at 2.46 million for the three months to December 2009, down 3,000 on the figure for the previous three months. But the rate of unemployment was unchanged at 7.8%.

The number of people claiming Jobseeker's Allowance rose by 23,500 to 1.64 million in January which marks the largest increase since July last year.

David Kern, chief economist at the British Chambers of Commerce, said: "While these figures are broadly welcome, they hide some worrying trends: full-time employment continues to fall; the number of people working part-time is at a record high; there was a large increase in those claiming benefits; and inactivity has risen further.
 
"The gap between public and private-sector wages is unacceptably large, reinforcing the need for a freeze in the overall public-sector wage bill, which will be a key measure in reducing Britain's unsustainable budget deficit.
 
"The economy is still very weak, and there is clearly no justification for an immediate tightening in monetary policy. The forthcoming Budget provides the Government with a perfect opportunity to introduce measures that will support businesses' ability to increase employment - with particular emphasis on full-time jobs. It should start by scrapping the hike in employer National Insurance Contributions, planned for next year, and substitute it for a 1% rise in VAT."

John Philpott, chief economic adviser at the CIPD, said: "The 3,000 fall in unemployment on the Labour Force Survey measure for the period October-December is miniscule and must be seen in the context of a corresponding fall of 12,000 in the number of people in work and a rise of 72,000 in the number of economically inactive people.  The latter rise is due mainly to a jump in the number of students - highlighting the degree to which young people are turning to study to avoid the dole.

"Most disappointing is the 23,000 January increase in the number of people unemployed and claiming jobseeker's allowance, which comes after a short period in which the claimant count has been falling. January's rise in the count is explained by a drop in the number of people flowing out of unemployment rather than an increase in fresh benefit claims, which suggests that recruitment activity weakened at the start of the year.

"Today's employment and unemployment figures confirm that the UK jobs market is still in an extremely fragile state. New official estimates of ‘underemployment' also show that the pain of the recession is much deeper than the headline numbers indicate. With a weak economic recovery set to result in further job losses in the coming months it is highly likely that the unemployment situation will get worse before it starts to get significantly better."