Official unemployment rate hits 10-year high of 6.3% in August

Unemployment rose to a ten-year high of 6.3 per cent at the end of August as the number of people at work in the State showed the first annual decline since 1991.

According to the latest Quarterly National Household Survey (QNHS), employment fell by 25,200 or 1.2% in the year to the third quarter, pushing total employment down to 2,120,800.

At the end of August there were 160,600 people out of work and number of unemployed has risen by almost 50 per cent or 53,300 over the last 12 months, the Central Statistics Office figures show. 

As a result the seasonally adjusted rate jumped from 5.4 per cent to 6.3 per cent between the second and third quarters this year. The unadjusted unemployment rate rose to 7 per cent up from 4.8 per cent compared with during the same period in 2007.

Chief economist with Bloxhams Stockbrokers Alan McQuaid said all 25,200 people who lost their jobs were Irish nationals and said the Live Register data would will have to be revised upwards.

Based on today's data he said unemployment could reach 7.5 per cent or high by the end of the year.

Over the last year the number of people employed in hotels and restaurants dropped by 5,400 and in other production industries fell 9,400.

During the same period the number of people employed in the health sector rose by 7,300 while those working in education were up 5,600.

According to a breakdown of those employed in the construction sector 55 per cent were working in residential and 45 per cent in general construction. At the height of the boom housing accounted for 70 per cent of all employment in the sector.

Chief Economist with KBC Bank Austin Hughes said the scale of turnaround in the jobs market and is underlined by comparing today's figures and those of a year earlier when employment rose by 69,000 or 3.3 per cent.

He said the fall in construction jobs was marginally greater than the 25,000 fall in economy-wide employment

The reduction in the number of people working in hotels and wholesaling and retailing "hint at a spill-over pullback in consumer spending across the broader Irish economy from the weakness in construction", he said.

Mr Hughes said the next six months were likely to see more job losses as the pace of decline appears to have accelerated since the late summer.

"That is likely to have led to another sharp drop in numbers at work in Ireland (and elsewhere) in the final months of the year."

Small and medium enterprise representative body Isme said the increase of 45,000 in the third quarter in the number of unemployed revealed an economy in "meltdown".

Mark Fielding Isme chief executive said a lack of access to credit for businesses and a lack of confidence were contributing to the fall in employment.

Elsewhere, Siptu warned that many of those who have recently been made redundant could be unemployed for some time.

"In the absence of serious action by the Government, we face the very real prospect of long term unemployment, particularly for workers in the construction and manufacturing sectors," said Siptu economist Marie Sherlock.

"Budget 2009 gave an additional three per cent in funding to Fás for training those in employment and for its employment programme. As a response to the unemployment crisis that we now find ourselves in, this is hugely insufficient," she added.