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National claimant count falls again in July but the decline is tailing off – RDA economist blog

11 August 2010

Labour market statistics released today show a further fall in the national claimant count, extending the run of falls to six months. However, with each successive months these falls have been getting smaller and the latest is only 3,800 compared to falls of 30,000 to 40,000 earlier in the year. This adds to growing evidence that the second quarter ended weaker than it started and the likelihood is that economic growth going into the second half of 2010 will not be strong enough to sustain any improvement in the jobs market.

Data from the Labour Force Survey for the three months to the end of June shows that employment increased by 184,000 compared to the previous three months. This compares to a reported increase of 160,000 for the three months to May, so most of the gain had already been reported. The fact that the majority of the additional jobs have been part-time means that the impact on the jobs shortage is less than the headline numbers might suggest. Meanwhile the number who have been unemployed for more than twelve months continues to rise, reaching the highest figure since March 1997. This is indicative of the emerging problem of entrenched unemployment wherein being unemployed for a long period makes returning to work more challenging, even when new job opportunities are available.

The data for the South West shows a stronger second quarter jobs performance with 32,000 additional people in employment compared to the previous three months. However, there was only a marginal fall in total unemployment so this appears to be a partial reversal of the earlier movement of people from employment to inactivity rather than to unemployment. As with the national picture, the claimant count in the region fell again in July but this fall was marginal at only 300 compared to recent monthly drops of 2,000 to 3,000. Overall the South West has a claimant rate of 3.0% and an unemployment rate of 6.1% which are the lowest rates for the UK regions.

Donald Barr

Economics and Evidence Manager

South West Regional Development Agency / South West Observatory Economy Module

Notes to editors

The Economy Module of the South West Observatory offers a reliable, up-to-date source and analysis of regional and local economic information. The research and intelligence published on the Economy Module website is provided free of charge as a “public good”, thanks to the valued sponsorship of the South West Regional Development Agency.

http://economy.swo.org.uk