UK unemployment falls by 5,000

David Cameron and Ed Miliband had a heated debate about the unemployment figures at PMQs

UK unemployment has fallen by 5,000, the Office for National Statistics (ONS) has said.

ONS data indicated 2.51 million people were out of work in the three months to April. The jobless rate was unchanged from three months earlier, at 7.8%.

Average earnings in the period were 1.3% up on a year earlier, thanks to a sharp rise in April bonus payments.

Meanwhile, Jobseeker's Allowance claimants fell a surprise 8,600 in May from a month earlier to 1.51 million.

The number of benefits claimants is at its lowest level in two years.

Average earnings rose by 3.3% in April alone, versus April 2012, mainly because many companies paid out their bonuses to workers a month later this year.

That delay was widely speculated to have been due to the fact that the top rate of income tax fell from 50% to 45% on April 6, with the late bonus payments benefiting from the lower rate.

Start Quote

It might not be perfect, but it has clear advantages over the other ways we might do it. ”

End Quote Caron Walker, Office for National Statistics

Despite the lift from higher bonuses, the 1.3% jump in total earnings in the three months to April was still well below the rate of inflation, with consumer prices up 2.4% in the year to April.

That means that the real purchasing power of wage earners continued to be eroded.

Excluding the effect of bonuses, earnings rose an even more paltry 0.9% from a year earlier.

Older workers

Unemployment in Scotland was down 6,000 over the three months to April. In Wales there was no change in the jobless total.

In Northern Ireland unemployment was down by 5,000 and in England unemployment was up by 6,000.

Throughout the UK, a record 29.7 million people are now in work.

Analysis

Another rise in the number in work and a small drop in the jobless total is a reversal of the trend of recent months.

Ministers will hope it marks a resumption of the improvement in the labour market seen for most of last year.

Private sector job creation continued to more than outweigh losses in the public sector, though it is worth noting that much of the overall jobs growth in the three months to April was through self-employment.

For those in work, average pay rises excluding bonuses of 0.9% are still well below the rate of inflation.

The squeeze on their spending power continues on a day when the Institute for Fiscal Studies reported that the fall in real wages since 2008 was the biggest for any comparable period.

The number of employed people over 65 has reached more than a million, the highest since records began in 1971.

Almost one in ten of the over-65s are in work, comprising 615,000 men and 388,000 women.

Other ONS data disclosed that public sector employment has fallen by 22,000 to just under 5.7 million, the lowest figure since 2001.

Long-term unemployment has increased, with those out of work and seeking a job for over a year rising by 11,000 in April to almost 898,000.

"Whilst any drop in unemployment is welcome, the overall picture is still gloomy," said Unison general secretary Dave Prentis.

"There are far too many people out of work, women and long-term unemployed are particularly badly affected, and public sector jobs are being slashed."

The unemployment and earnings figures provoked a heated exchange during Prime Minister's Questions in Parliament.

David Cameron said the figures were a sign that the economy was improving.

"They show employment, the number of people in work in our country, going up, they show unemployment going down and the claimant count, the number of people claiming unemployment benefit, has fallen for the seventh month in a row."

But the Labour leader, Ed Miliband said the reality was average earnings were not rising fast enough and many people in the UK were struggling.

"Day in, day out, what people see are prices rising, wages falling while the Prime Minister tells them they're better off. He claims the economy is healing. But for ordinary families life is getting harder."

The figures come a day after another report from the ONS showed the UK's industrial output rose for the third straight month in April.

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