May figures show dip in jobless total

The continuing rise in unemployment was interrupted in May, according to new figures showing a slight dip in the number of people claiming unemployment benefit over the month.

Seasonally-adjusted live register figures released by the Central Statistics Office (CSO) yesterday show that 172,200 people were unemployed last month, down 900 from April.

The slight fall partly reversed a substantial rise recorded one month previously as casual education employees joined the dole queue over Easter skewing the underlying picture.

Unadjusted figures pointed to a fall of 4,835 in the number of people on the register last month, leaving the total at 166,105.

The standardised unemployment rate remained steady at a three-year high of 4.6 per cent, however, while economists maintained predictions that it would reach at least 5 per cent before the end of the year. Such an increase would bring unemployment back to a level last seen towards the end of 1999.

Mr Robbie Kelleher, head of research at Davy Stockbrokers, said the May live register numbers should be taken in conjunction with the claimant increase recorded in April, which was largely due to the timing of Easter.

While last month's fall may simply reflect the return of many casual staff to work, overall employment trends are still not as bleak as they could have been, according to Mr Kelleher.

Davy is expecting the standardised unemployment rate to reach 5.5 per cent by year-end, as an average monthly growth of about 1,500 in the live register is maintained.

"It's not as bad as you might have feared," Mr Kelleher said.

IIB Bank chief economist Mr Austin Hughes said the underlying trend in the figures provided grounds for cautious optimism on the economy at a difficult time.

"It's just about consistent with flat unemployment growth," Mr Hughes said. "There's some sort of forward movement."

Mr Hughes said domestic spending, and thus employment, had been buoyed by low interest rates in the Republic rather than being negatively driven by the Iraqi war and undesirable currency movements.

"There is an element of confidence in business - they're not cutting jobs right, left and centre," Mr Hughes said, describing the jobs environment as "flexible".

On an annual basis, the number of people "on the dole" rose by 6.9 per cent to 172,200 in May, according to the seasonally-adjusted figures. Unadjusted figures show that the live register total rose by 7.2 per cent to 166, 105 year on year.

An unadjusted regional breakdown of the numbers shows that all regions recorded a fall in claimant numbers last month, with the largest decreases coming in the Mid-West and South-West.

Fianna Fáil said the figures proved that the Government's "prudent" management of the economy was paying off, while Labour described the reduction as "minor" and called for a more pro-active effort on job creation.

The Irish National Organisation for the Unemployed (INOU) meanwhile welcomed the reduction in claimant numbers but warned it should not be taken as a sign that unemployment levels were falling.