The number of people claiming jobless benefit in Britain fell more than expected in May to its lowest rate in more than a year, but the wider measure of unemployment continued to climb, according to data released this morning.
The Office for National Statistics said the number of people claiming jobless benefit fell by 30,900 in May.
Analysts had forecast a fall of 20,000. Moreover, April's fall was revised to show a fall of 32,000, significantly bigger than previously reported.
The number of unemployed on the wider ILO measure rose by 23,000 in the three months to April to 2.472 million. That took the jobless rate up to 7.9 per cent, still below forecasts for a reading of 8.0 per cent.
The pound rose a fifth of a cent against the dollar after the figures, which reinforced hopes the economic recovery is gathering pace after an 18-month recession.
The claimant count and ILO measures have diverged sharply in recent months, but the ONS said that they measure different things. Where there are some similarities is in the number of long-term unemployed, which is rising on both measures.
Still, unemployment has not gone up as far as many had feared after the worst recession since World War Two, and most analysts expect the labour market to continue improving over the next few months.
Risks remain, however, from big cuts in government spending that could lead to thousands of layoffs in the public sector. Separate figures from the ONS showed that the number of people employed in the public sector fell by 7,000 in the first three months of this year to 6.090 million.
The data also shows that the spike in average earnings seen in earlier months has now subsided and downward pressure on pay looks likely to resume.
Average weekly earnings growth slowed to 4.2 per cent in the three months to April compared with a year ago from 4.3 per cent in the three months to March.
The slowdown in annual earnings growth in April versus March was much more dramatic. Earnings in April were just 0.9 per cent higher than a year ago, compared with an annual rise of 6.2 per cent in March.
REUTERS