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U.K. Unemployment Rate, Jobless Claims Fall Unexpectedly


The rate of unemployment and the number of persons claiming the job seekers' benefits in the U.K. posted surprise declines as the number of part-time workers hit the highest level on record during the March quarter, official data showed Wednesday.

The latest figures from the Office for National Statistics revealed that the jobless claims fell 13,700 from a month earlier to 1.59 million in April. Economists had expected an increase of 5,000 in the claimant count.

Meanwhile, March's claimant count change was revised to show a decrease of 5,400 compared to a gain of 3,600 reported earlier. The latest decline was the second consecutive monthly fall in this series and the largest fall since July 2010.

The claimant count rate remained unchanged at 4.9 percent for an eighth straight month. Economists had expected an increase in the figure to 5 percent.

The unemployment rate during the three months through March fell by 0.2 percentage points from the previous three months to 8.2 percent. Economists had forecast the rate to remain steady at 8.4 percent.

The number of unemployed persons decreased by 45,000 from the December-February period to reach 2.63 million in the March quarter.

The youth unemployment rate eased again during the period from record levels seen towards the end of last year. The unemployment rate for persons in the 16-24 age group fell to 21.9 percent from 22.2 percent in the December-February period.

The Organization for Economic Co-operation and Development said in a report on Tuesday that more than one in five young people in the labor market in a number of advanced economies such as the U.K., Italy and France are out of work.

OECD Secretary-General Angel Gurria urged the governments to take decisive and concrete action, given that youth unemployment in these countries is more than double the unemployment rate affecting the general population.

The employment rate rose by 0.2 percentage point to 70.5 percent in the March quarter. There were 29.23 million people in employment, up 105,000 on the quarter.

The statistical office said that the quarterly increase in employment was entirely due to more part-time workers. The number of part-time workers increased by 118,000 on the quarter to reach 7.99 million, the highest figure since comparable records began in 1992.

On the other hand, the number of full-time workers fell by 13,000 to 21.24 million during the period.

"While the falls in unemployment and marked rise in employment evident in the latest data is good news, we still suspect that unemployment is headed higher over the coming months as a consequence of extended soft economic activity, heightened business caution, and public-sector jobs being pared substantially," said Howard Archer, chief European and U.K. economist at IHS Global Insight.

Earlier this month, the Centre for Economic and Business Research said that unemployment may increase further over the next five years. The jobless total is forecast to increase almost everywhere in the country, with the rate hitting 10.7 percent by 2016, the report said.

The ONS said total pay, including bonuses, rose 0.6 percent year-on-year, representing weakest growth since March-May 2009. Compared to the three months ended February, total pay declined 0.5 percent.

Regular pay, excluding bonuses, rose 1.6 percent on a year earlier, but was unchanged on the three months to February 2012.

The Confederation of British Industry said this month that the outlook for consumer spending remains relatively subdued as Britons are likely to remain cautious due to expectations of relatively modest wage growth and further increase in unemployment.

by RTTNews Staff Writer

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