The number of persons claiming job seekers' allowance in the U.K. increased unexpectedly in May as the economy's return to recession made firms hesitant to hire more staff.
The claimant count increased by 8,100 from the previous month to 1.60 million in May. The figure was forecast to fall by 4,000 on a month-on-month basis. The claimant count rate remained steady at 4.9 percent as expected.
At the same time, the ILO measure of unemployment declined by 51,000 to 2.61 million in the three months to April. The unemployment rate for the February-April period was unchanged at 8.2 percent, in line with economists' forecast.
This is a mixed set of data but there are hints that the labour market is starting to come under increasing pressure from the economy's return to recession, said Howard Archer, Chief U.K. and European Economist at IHS Global Insight.
Excluding people in full-time education, there were 709,000 unemployed persons in the age group of 16 to 24 years in the three months to April. This was 23,000 less than in the three months to January.
The number of people in employment increased by 166,000 on the quarter to reach 29.28 million in the three-months to April. This was the largest quarterly increase since the three months to August 2010, the statistical office said.
The number of full-time workers increased by 82,000 compared to the preceding three months and that of part-time workers increased by 83,000.
"It is evident that restrained earnings growth as well as marked increases in part-time jobs is helping to keep unemployment down," Archer noted.
"We 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."
Data also showed that the number of people unemployed for more than six months increased by 49,000 to reach 1.41 million.
In a report on Tuesday, the Institute for Public Policy Research said long-term unemployment is the "hidden crisis" of the slow economic recovery. Long-term unemployment increased by 32,000 to 887,000 and is now at its highest level since 1996, the think tank said.
Also, the report warned that unemployment is set to rise again, peaking at 2.75 million.
According to today's ONS figures, the average weekly earnings, including bonus, rose 1.4 percent during the three months through April compared to the same period last year. The pace of increase was faster than the expected 0.8 percent rise. Regular pay, excluding bonuses, rose 1.8 per cent on a year earlier.
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