Unemployment rose to ten-year high of 8.3 per cent at the end of 2008 as the number of jobless people claiming benefits surged by a record 121,100 in the year to December.
During 2008 the number of Live Register jobseekers' benefit and allowance claimants soared by a record 71 per cent to bring the total number of claimants to 293,500. This is the highest level of claimants since December 1993, according to seasonally adjusted figures released by the Central Statistics Office (CSO) this morning.
The register grew by 16,300 people last month, according to the CSO.
This is the secondly highest monthly total on record, just behind the 16,700 recorded in November. On an unadjusted basis the December rise was a record 22,777.
Alan McQuaid, chief economist with Bloxhams Stockbrokers, said the addition of 49,000 people to the Live Register in the final quarter of 2008 “doesn’t augur well for job prospects in 2009”.
“These latest figures confirm the worsening labour market trend of recent months. Apart from the sharp fall in construction employment, other sectors like manufacturing, retail, transport, and financial services are starting to feel the pinch too.” he said.
According to Mr McQuaid things are likely to get worse before they get better.
“The deteriorating labour market situation has also blown a massive hole in the public finances through both lower tax receipts and increased social welfare payments. It is estimated that it costs the economy €11 million for every 1,000 people on the Live Register,” he said.
The Irish Small & Medium Enterprises Association (Isme) responded to the data by accusing the the Government of failing to address an escalating unemployment crisis that had seen the jobless rate rise from 4.9 per cent at the start of the year to 8.3 per cent in December.
Mark Fielding, Isme chief executive, said: “Government has utterly failed to even indicate how it is going to address the problems of business and small business in particular, who are haemorrhaging hundreds of jobs weekly.”
Davy Stockbrokers economist Rossa White said the trend of job losses was likely to worsen. “Unfortunately, we have not yet seen the worst month. Construction and private service job losses are accelerating.”
He said one factor contributing to the rise was an increase in the number of part-time workers, those whose work has been cut back to three-days a week. While these employees can claim some benefits “crucially, workers are not officially unemployed” and as a result, Mr White suggested the live register estimate of unemployed may be skewed upwards.
Mr Ronnie O'Toole, chief economist at National Irish Bank, said there was “no reason for optimism in the today’s figures, and the outlook for 2009 is very bleak.”
Coupled with the increase in new claimants Mr O'Toole said people on the live register were finding it increasingly difficult to find new employment.
“Of the total number of people on the live register interviewed by Fás in January-October 2008, the proportion that had left the live register for a job by November was 22 per cent, a significant fall from 27 per cent in 2007.”
For males in the age group of 25 to 44, the pattern of spending longer on the Live Register was particularly pronounced, he said.
“Unfortunately for those involved, this is the age group with the largest level of household debt to service. Typically median household debt rises sharply after the age of 25, before peaking in the 35-44 age group and falling sharply thereafter. By age 55-64 the median household has virtually no debt,” he said.
Fás economist Brian McCormick suggested that if the current rate of increase in the Live Register is maintained the unemployment rate “will reach at least 12 per cent over the course of the year”.
