Unemployment levels rose by 281,000 to 2.38million in the three months to May according to the Office for National Statistics (ONS). This is an increase of 7.6%, the highest for over 10years.

The number of people claiming unemployment benefit rose by nearly 24thousand in June, reaching 1.56million. This, overall, is still less that was predicted by analysts.

Young people have been particularly hit as companies cut back on intake in order to reduce costs. Unemployment in the under24s is at a 16year high of 726thousand.

The number of people that have been looking for work for over a year also increased to 528,000-an 11year high.

The general secretary of TUC said: “It’s particularly worrying that over half a million unemployed people have been out of work for at last a year, including 133,000young unemployed people.

Crisis Not Over

“With a new generation of school and college leavers soon starting to look for work, our unemployment crisis will get even bigger.”

An independent survey says that two-thirds of people across Britain know at least one person that has lost their job due to the recession.

According to another study, two-fifths of people also worry about losing their job in the recession.

The economy may be stabilising, but economists still expect unemployment to continue to increase.

Capital Economics’ Vicky Redwood explained how the figures show there to be “conflicting signals about whether conditions in the labour market are getting better or worse.”

Rise In Earnings?

The new total of unemployed in the three months leading up to May is the biggest quarterly rise since records began in 1971.

On the other hand, the rise in claimants for unemployment benefit is less than the expected 39,000.

Vicky Redwood said: “The claimant count measure of unemployment in June posted its smallest rise in a year. However, the wider ILO measure posted its biggest rise on record.”

The government are using the ILO figure of 2.38million unemployed because it apparently takes into mind a more comprehensive indicator of the job market.

Unemployment may be at a high, but so are earnings including bonuses. They rose by 2.3% in the quarter leading to May which is the highest since December.

3.1Million Peak Next Year

But it seems that bonuses are making all the difference. When excluded, average earnings only increased by 2.6% which is the lowest rate since the data began to be collected in 2001.

The chief economist for the British Chambers of Commerce said that the figured were “grim reading.”

He said: “On the basis of these numbers, we reaffirm our forecast that unemployment will peak at around 3.1million next year.”

Unfortunately, as unemployment rises, the number of job vacancies falls. In the three months leading to June, vacancies were down 30,000compared to just the previous quarter.

There is also a gender difference. The number of unemployed men rose by nearly 200,000to reach 1.46 million, compared to a rise of 84,000unemployed women, which makes a total of 107,000.

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