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Fall in jobless total slowing down

The Government was given some pre-Christmas cheer on the jobs front when new figures showed another fall in unemployment and a record number of people in work.

But a cut of 63,000 in the jobless total to 1.96 million between August and October was the smallest quarterly fall for a year.

The Office for National Statistics (ONS) reported that 30.8 million people were in work, the highest since records began in 1971, and 588,000 up on a year ago.

The number of people claiming jobseeker's allowance was down by 26,900 in November to 900,100 - the 25th consecutive monthly fall.

Pay, including bonuses, increased by 1.4% in the year to October, up by 0.4% on the previous month, and higher than the current rate of CPI inflation.

Average pay is now £483 a week before tax and other deductions, an increase of 55.3% compared to the year 2000.

Other data showed that public sector employment has fallen by 7,000 to 5.4 million, the lowest level since records began in 1999.

The UK's unemployment rate is now 6%, down by 0.2% on the previous quarter and by 1.4% over the past year.

Private sector employment is 890,000 higher than a year ago and now stands at more than 25 million.

Long-term unemployment has fallen, with those out of work over a year down by 191,000 to 684,000.

The jobless rate for 16 to 24-year-olds has remained at 16%, while the proportion of self-employed workers has fallen slightly to 14.7% of total employment.

Work and Pensions Secretary Iain Duncan Smith said: "These remarkable figures show that our long-term economic plan to create a better more prosperous future for Britain is working. Behind them are countless stories of individual hard work and determination, with more people than ever before feeling financially secure.

"What we can see at the end of 2014 is that our welfare reforms are ensuring that people have the skills and opportunities to move into work. Whether that's work experience for young people to get their foot on the career ladder, the benefit cap encouraging people to get a job, or the Work Programme which is helping more people than any previous jobs scheme.

"These figures show that our long-term economic plan to create a better, more prosperous future for Britain is working - with thousands of people feeling more secure over the Christmas period with a regular wage."

Business Secretary Vince Cable said: " Today we've had another remarkable set of labour market figures, which show that the strong performance of the labour market has been broad-based. This has led to an almost record share of the UK working age population being in work. In addition we are now seeing rises in average pay growth above inflation, meaning annual real wage rises for many workers."

"However there is still more to be done. Although youth unemployment has fallen in the past year, it remains too high. That is why we will continue to encourage firms to invest in the UK and equip British workers with the skills they need to compete in the jobs market."

Employment Minister Esther McVey highlighted the fact that 95% of new jobs in the past year were full-time.

She told the Press Association that the UK was creating more jobs than its main economic rivals including the United States and Germany, showing what a "record-breaking" year the country had enjoyed on the employment front.

The rise in pay was also "positive" news, she added, saying that average earnings growth had moved from "nudging" above inflation last month.

"We said when we came into government that we wanted to save the economy, rebuild and rebalance the economy then see wages go up."

GMB union general secretary Paul Kenny said "This is the fifth Christmas with this Government in power and, while the recovery under way is welcome, it should be much further ahead. There are too many households this Christmas with jobless workers."

Ian Burke, director of totaljobs.com, said: "Unemployment is still falling, yet it continues to drop at a slower pace than we've become accustomed to. While the ONS data show the number of people in work has risen, the figures are likely to be driven in part by an increase in short-term and insecure work over the festive season."

Chris Jones, chief executive of the City & Guilds Group, said: 'It is encouraging to see so many more people in work this Christmas compared to the same time last year. But we shouldn't let this good news lull us into a false sense of security because the figures tell us only part of the story.

"If we are seeing more people in work, why are we still seeing skills gaps in a number of different industries? And there are still disgracefully high numbers of young people out of work, with no change since the summer. This is no cause for celebration."

Neil Carberry, CBI director for employment and skills, said: "As we come to the end of the year, it's good news that unemployment continues to fall, as jobs are being created. It's good to see even more people working full-time.

"We are starting to see the first signs of real pay growth picking up, which will have given households an encouraging boost in the run-up to Christmas."

David Kern, chief economist at the British Chambers of Commerce, said: "The UK labour market remains strong, resilient and flexible. However the decline in unemployment was the smallest in more than a year, indicating a slowdown in the pace of growth.

"These figures also highlight that pay is now growing faster than inflation. While this is an encouraging development, it would be a mistake to interpret it as an argument for early interest rate rises."

TUC general secretary Frances O'Grady said: "Today's figures show some long overdue improvements, but at this rate it will take over a decade to recover the real value of people's earnings. And there is a very long way to go to deal with the problem of so many jobs being insecure, short hours, or on zero hour contracts.

"We need to make sure that nobody is left behind in the recovery, so today's increase in long-term unemployment for young people is a growing concern."

Andrew Hunter, co-founder of jobs site Adzuna, said: "The jobs market has passed several major milestones in the last month: pay has outpaced inflation and there are now more available vacancies than there are jobseekers. Our latest report found there were 0.95 jobseekers per every available vacancy.

"Although jobseekers outnumber available positions, there are not enough skilled workers to meet demand in booming sectors like manufacturing and IT. Many of the jobs created over the last month have been seasonal slots to support customer service roles over the Christmas period.

"And the real wage increase is being helped by uncertainty in the eurozone, and falling oil prices, which have forced inflation to artificially low levels."

Gerwyn Davies, of the Chartered Institute of Personnel and Development, said: "Today's headline employment figures provide a lot of festive sparkle, given the improvement in the quality and quantity of jobs that have been created over the past year.

"However, while average earnings have moved up a little in the last few months, this will not be sustainable unless we can improve our productivity."

James Sproule, chief economist at the Institute of Directors, said: "This is an important development in the UK's economic recovery. The past few years have been characterised by rapid falls in unemployment, coupled with a freeze on wages.

"Today's figures showing wages up by 1.4%, when combined with a stable rate of unemployment, suggest slack in the labour market is tightening. But this is not the only driver of wages, and improving corporate performance is also contributing to employers' ability to raise wages.

"We expect real wage growth to remain a feature of the recovery into 2015."

Shadow work and pensions secretary Rachel Reeves said: "Today's fall in overall unemployment is welcome, but after four years when prices have risen faster than wages, working people are over £1,600 a year worse off since 2010.

"There is a huge amount of lost ground to catch up. And while falling global oil prices have led to the rate of inflation going down, wages remain sluggish.

"Over the course of this parliament, working people are set to see the biggest fall in wages of any parliament since 1874/80. The Government's failure to tackle low pay is making it harder to get the deficit down."

Matthew Whittaker, chief economist at the Resolution Foundation think-tank, said: "It's encouraging to see pay growth may finally be gaining some momentum after what has been another disappointing year for wages.

"Pay and productivity growth will be the key measures to watch in 2015. Significant improvements would boost living standards and make the Government's fiscal job far easier. But a continuation of sluggish pay growth will mean the economic recovery lacking the feel-good factor. Significant differences in recent pay projections from the Bank and the OBR show there is considerable uncertainly on these measures. Crucially, neither are projecting a long-overdue rebound in pay, following the UK's six-year pay squeeze.

"Rising employment and the return of full-time roles has been the big success story of 2014. The question now is whether a strong labour market will lead to a reduction in the less secure forms of employment that have grown during the downturn, or whether the historically high level of non-traditional forms of work - such as zero-hours and temporary contracts - is here to stay."

Chancellor George Osborne said: "This is a major moment in the British recovery. Not only do we have jobs being created and unemployment falling, but wages are now rising significantly above inflation.

"If we want this to continue at a time when there are many risks in the global economy, we have got to keep on working through our long-term economic plan."

David Cameron told the House of Commons that the unemployment figures represented "an important moment for our country".

Speaking at Prime Minister's Questions, he said: "What these figures show nationally is they show employment up, they show unemployment down, they show the claimant count falling for the 25th consecutive month.

"What I think is an important moment for our country is unemployment is now below 2 million and wages are rising faster than inflation - something which I am sure will be welcomed across the House."

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