UK economy reports fall in jobless benefit claims

In what can be termed as convincing sign that the UK economy is on the road to recovery, the Office for National Statistics has reported a fall in claimant count, a measure of those drawing unemployment benefits, by 6,300 in November to 1.63 million. The claimant count jobless rate now stands at 5 percent.

This is for the first time that the claimant-count has fallen since February 2008. The drop has come as a surprise for economists who had expected the claimant count to rise by 12,300 and had expected the jobless rate to be 5.1 percent.

Even the October data has been revised to show a claimant-count increase of 5,900, down from originally reported 12,900. Even the claimant count jobless rate was revised to 5 percent.

Smallest rise in unemployment since mid 2008
Further, the International Labor Organization measure, the official measure of unemployment, has reported a rise of 21,000 in the three months ending Oct. 31. This is the smallest increase since March to May 2008.

Thus the unemployment figured remained at 2.491 million, pushing the jobless rate to 7.9 percent, a 13-year high.

Philip Shaw, chief economist was quoted by The Guardian as saying, "The labour market figures are much more benign than expected. In particular the fall in the claimant count comes as a surprise as does the increase in employment in the last three months."

Government efforts pay off
The drop is largely credited to government’s efforts to create jobs in the economy.

The government had launched £1bn government scheme, for creating jobs and work experience for young unemployed people, in late July.

The aim of the program was to create jobs in sectors like social care, education, tourism and sport.