Unemployment falls for fourth month in row with work increases in London and more jobs for the over 65s

Unemployment has fallen for the fourth month in a row, it was announced this morning, with more jobs being created - especially for over 65s. The unemployment rate is now 8.1 per cent, down by 0.2 per cent.

However long-term unemployment increased, with those out of work for more than two years up by 18,000 to 441,000 - the worst figure since 1997. The number of people out of work for more than a year rose by 3,000 to 885,000, and there were just over a million unemployed 16 to 24-year-olds, down 10,000 on the three months to February.

The monthly figures from the Office for National Statistics showed that the total number of jobless fell by 65,000 to 2.58 million, the lowest level for almost a year, while the number of people in employment increased by 181,000 to just under 30 million, the highest level for almost four years.

But those people claiming jobseeker's allowance increased by 6,100 in June to 1.6 million, including more than 8,000 women, the highest figure for 17 years. The ONS said the increase among women was likely to have been affected by a change in eligibility rules for lone parent income support from May.

Most age groups showed increases in employment, with a rise of 52,000 in over-65s in work to reach 929,000, the highest since records began in 1992.

Other figures showed that those classed as economically inactive, including people looking after a relative, on early retirement or who have given up looking for work, fell by 61,000 to 9.2 million, mainly due to a cut of 82,000 among students.

The biggest falls in unemployment, and increase in work, was in London, suggesting that the Olympic Games is having an impact on the figures.

The number of vacancies increased by 10,000 in the quarter to June to 471,000.

Average earnings increased by 1.5 per cent in the year to May, up by 0.1 percentage points on the previous month, giving an average weekly wage of £468.

Employment Minister Chris Grayling today visited a new delivery office opened in London by TNT, which said it planned to create 20,000 new jobs across the UK in the next five years.

Around 70 new posts have been created at the new office as part of a pilot scheme delivering post to households and businesses in west London.

John Walker, National Chairman, Federation of Small Businesses, said they were still concerned about long term unemployment.

“Research shows that the longer someone is out of unemployment, the harder it is for them to get back into the jobs market,” he said.

“We know that small companies are more likely to employ people that have been out of work for a significant time. However, small firms are being squeezed by rising overheads, they lack confidence to take on new staff and are still struggling to get credit from the banks to grow. “Without clear, positive improvements in these areas, small businesses will not be able to buck this worsening trend.”

Howard Archer an economist at IHS Global Insight said the figures showed the UK labour market is was "impressive resilience".

He suggested one factor was that wages were being pegged back, meaning real-term pay cuts for millions of people whose salaries are not keeping up with inflation.

Chris Grayling, the Employment minister said he welcomed the news but admitted there was still a long way to go.

“This is an encouraging set of figures in what is still an incredibly difficult economic climate. Not only is unemployment falling but in overall terms there are now almost 100,000 less people on benefits since the 2010 election. We still have a long way to go but this is a step in the right direction.”

But Len McCluskey, General Secretary of the Unite unions said the growth in the number of long-term unemployed showed how hard it would be for the disabled workers at Remploy to find employment when those factories closed.

"It is madness for the Work and Pensions Secretary, Iain Duncan Smith, to think that there is work readily available for those disabled workers he is throwing on to the dole queue because of his cruel policies,” he said.

"The number of long-term unemployed is a scandal. This situation is only going to be made worse by the 1,700 Remploy workers being made redundant by the end of the year in the first tranche of factory closures."

Unison general secretary Dave Prentis added: "Sadly the unemployed cannot and the Government should not take comfort from these figures. The Olympic effect may give the impression of a recovery, but it is a mirage. The number of long-term unemployed is still rising, and huge numbers of women and young people are still struggling to find work.”