Shortage of jobs prompts part-time boom

Youth unemployment stands at a16-year high, while more than 1.5 million people are in temporary or part-time work because they cannot find a full-time post.

The ONS reports that the number of people claiming jobless benefit rose by 5,300 last month, the biggest rise since the start of the year. Analysts said that a marginal fall in the overall unemployment rate, from 7.8 per cent in the quarter to July to 7.7 per cent in August, disguised more ominous trends.

Overall, unemployment slipped by 20,000 to 2.45 million, but 232,000 people aged between 16 and 24 have been out of work for more than a year, the highest since 1994. The number of the over-50s in long-term unemployment is 40 per cent up on 2009 at 165,000, with 83,000 of them not having seen work in over two years.

Although employment has been growing strongly in recent months, which helped to push the jobless rate lower, the pace is slowing, and the vast majority of the new jobs being created are part-time – 143,000, against a fall of 17,000 in full-time jobs. With wage growth of 1.7 per cent falling way behind inflation of more than 3 per cent, and more earners in less secure, usually lower-paid, occupations, both retail spending and the housing market seem set for a hit in the coming months.