Benefit claimants fall again, but unemployment in the UK and North West rises

Figures released today show that 29,230 people were claiming Jobseeker’s Allowance (JSA) in Greater Manchester in June 2015. In addition to JSA, there were 16,230 people in Greater Manchester in June who were out of work and were claiming Universal Credit. This gives a combined JSA/UC figure of 45,460 – which is 16.9% lower (-9,255 fewer people) when compared with the same time last year.

Commenting on the data Stephen Overell, principal for employment and skills at New Economy, said:

“It’s a complicated story on the jobs front this month. The numbers of people claiming benefit continued to fall – albeit at a far slower pace than over the past couple of years once those claiming both Universal Credit and Jobseekers Allowance are accounted for.

“But the other measure of unemployment, which uses a survey of the population and is the one that the government prefers to use to count the unemployed, showed a rise in unemployment both nationally and in the North West. In the North West, unemployment rose by 1,000, but there was a sharper fall in the total of employed people – they were 26,000 fewer employees in the three months to May 2015 in the previous quarter.

“So what is going on? First, it’s yet another warning that the claimant count is a poor reflection of labour market health. The survey measure is the one to trust for jobs news and we do not yet have this data for Greater Manchester, only for the North West. Second, with pay rises at last starting to come through, there may be an underlying rise in productivity that is occurring – often meaning that firms can do the same or more with fewer staff.

“Finally, it is worth remembering that the UK is sometimes said to have had a “jobs miracle” in recent years – it sustained relatively high employment and falling unemployment in a weak economy. Modest rises in unemployment in one month do not amount to a trend, but we may now be entering a less miraculous phase. Much will depend on business confidence and the labour force strategies of firms as they rethink their workforces in the light of a strengthening economy.”