Work Foundation: Job figures 'very good indeed'

The Office for National Statistics (ONS) announced today that the unemployment figures dropped to 2.56m in the three months to June, a figure of 8%, down from 8.2%.

Ian Brinkley, director at The Work Foundation, said:

"These figures are very good indeed – and almost impossible to explain. The economy has been contracting for at least six months according to the official statistics.

"Yet the private sector is still hiring people in large numbers. Moreover, many of the new jobs are full-time and permanent. If we were just looking at the labour market, we would say the UK is on track for recovery rather than being in the double dip recession shown by the GDP figures."

Mr Brinkley said that there is evidence that the rise in employment is not just a "short-term Olympic effect".

"The more plausible explanation is that firms are holding onto their existing people because they do not want to risk losing valuable skills, although this does not really explain why employers are still expanding their workforces," he said.

"On balance we still expect the labour market to go into reverse in the next few months, especially if the Eurozone economies continue to contract.

"But if the UK labour market goes on apparently defying economic gravity, we also need to take a hard look at whether the current GDP statistics are giving too pessimistic a view of the UK economy.”

Minister for Employment Chris Grayling said:

"This is an encouraging set of figures in what is still an incredibly difficult economic climate. Not only is unemployment falling but in overall terms there are now almost 100,000 less people on benefits since the 2010 election. We still have a long way to go but this is a step in the right direction."

Shadow Work and Pensions Secretary Liam Byrne said:

"It looks like about 90% of the fall in unemployment has been in London where there has obviously been a boost from the Olympics."

"In about half of Britain's regions you've got unemployment going up. I think the government needs to act now to to put a lot more fuel in the tank of its back to work programmes before things get any worse."