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Unemployment reaches 2.51 million, ONS figures show

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Unemployment has increased by 80,000 over the quarter to July 2011, taking the number of unemployed people to 2.51 million, according to results from the Office of National statistics, published this morning.

Similarly, the more recent monthly claimant count figure for unemployment, recording the numbers claiming Jobseekers' Allowance rose again by 20,300 in August.

This is the sixth successive month of increase, taking the total to 1.58 million, and rapidly approaching its previous peak in October 2009. But the report also found total pay (including bonuses) rose by 2.8 per cent on a year earlier and regular pay (excluding bonuses) rose by 2.1 per cent on a year earlier.

Public sector employment decreased by 111,000 in the second quarter of 2011, to 6.037 million. Local government employment decreased by 57,000; central government decreased by 47,000 and employment in public corporations decreased by 7,000.

Commenting on the findings, Nigel Meager, director of the Institute for Employment Studies, said: "Despite a few false dawns in recent months, the UK labour market remains in the doldrums. Since the recession began in 2008, unemployment grew less than many commentators expected to nearly 2.5 million by May 2009. However, it has stubbornly remained at that level for over two years. Similarly, the number of job vacancies fell from around 700,000 to 425,000 in the first year of recession, but has been stuck below 500,000 for the last two years.

"Today's figures raise a real concern that, after two years bumping along at this low level of demand, the jobs market, rather than entering a recovery stage, is about to take a turn for the worse, with all the key figures moving in the wrong direction. The early impact of the public sector cuts is also now starting to show in the figures and, for the first time this quarter, public sector job loss now considerably outweighs any growth in the private sector.

"None of this is at all surprising given the state of the macro-economy. It's now three and a half years since the onset of recession. At the same point following each of the last two recessions in the 1980s and 1990s, GDP was back above its pre-recession level, while this time national output is still languishing about four percentage points below that level.

Steven Kirkpatrick, MD at recruiter Adecco, added: "This time of year is traditionally slow for the jobs market, so it is no surprise to see that employment levels have fallen. We've seen this across the board, although some sectors have fared better than others, with engineering and construction remaining amongst the most active sectors, while banking, insurance and finance have seen the sharpest fall. Only time will tell whether this is entirely because of the seasonal flux or whether other elements are influencing the market.

"It is crucial, however, that the temporary market continues to thrive, as this has been shoring up the jobs market as a whole for some months now. It's essential that companies are not deterred from hiring temporary staff by the introduction of AWR in October. Despite media coverage to the contrary, we are confident that as long as businesses plan ahead and ensure that they are prepared, the new legislation should not have any negative impact on them."