UNEMPLOYMENT HAS reached a rate of 12.4 per cent, with a record 440,000 people claiming jobseekers’ benefit payments in August, but there are signs that the labour market is stabilising, according to yesterday’s Central Statistics Office (CSO) figures.

The rate at which people are signing on continued to slow down last month. The seasonally adjusted Live Register of unemployment benefit claimants increased by 5,400 people in August – the lowest monthly rise since April 2007.

Separate figures from the Department of Enterprise, Trade and Employment showed that there were 5,914 redundancies under the redundancy payments scheme in August, taking the total to 54,887 for the year to date.

The number of redundancies so far in 2009 is 134 per cent higher than in the same period last year, with the department’s statistics showing that the job losses have been felt across all sectors.

Economists said yesterday that as a result of the quicker-than-expected stabilisation in the labour market, the Government’s own unemployment forecasts were now too pessimistic.

The number of new claimants joining the dole queues has fallen each month since the record addition of 33,000 claimants in January, suggesting that the Irish economy is no longer plummeting at the sharp pace it was at the turn of 2009.

“This slowdown in the rise in unemployment suggests that the biggest shocks have passed,” said Ibec economist David Croughan.

The Government had forecast that the number of people receiving jobseekers’ benefit or allowance would average at 440,000 this year. However, Ulster Bank economists Simon Barry and Lynsey Clemenger said the average number of claimants was now on track to be about 410,000 a month.

“All else equal, this should contribute to some welcome easing of the pressures on the public finances,” they wrote in a note.

However, the Opposition criticised the Government for allowing the Live Register to swell by 286,000 people since the 2007 general election.

Labour Party leader Eamon Gilmore said the number of people out of work was likely to increase further, citing a warning by the Construction Industry Federation that cuts in the Government’s capital spending programme would result in the loss of an additional 100,000 building jobs.

“The Government appears to have thrown in the towel on unemployment and seems resigned to figures on the Live Register going over 500,000,” he said.

Fine Gael enterprise spokesman Leo Varadkar said the figures should not be presented as evidence of a turnaround in the labour market. “The ship is sinking more slowly, but it’s still sinking. We are facing a winter of discontent unless the Government takes immediate action to reverse the ongoing rise in unemployment,” he said.

The CSO’s estimated unemployment rate of 12.4 per cent in August compares to a rate of 12.2 per cent in July. But the more modest rise compared to earlier this year is partly the result of a contraction in the size of the overall labour force. The number of non-Irish nationals on the Live Register went into reverse in July, suggesting that ongoing turbulence in the Irish economy is prompting foreign nationals to leave the State.

Alan McQuaid, economist at stockbrokers Bloxham, said it was also likely that some former workers had become discouraged from searching for jobs or were staying on longer in education.

Some 95,745 people under the age of 25 are on the Live Register, up from 55,000 a year ago.

Youth Work Ireland said ignoring the specific needs of young unemployed people would do “enormous long-term damage to Ireland and its economy”.

Small business group Isme said the Government’s employment subsidy scheme amounted to “chicken feed”, as it would only assist 500 companies at most.

The Irish National Organisation of the Unemployed (INOU) said it was concerned about the level of take-up of the subsidy scheme.