Shock rise in UK jobless claims as unemployment falls In brighter news, however, the number of people employed in the private sector increased by 205,000, to reach 23.38m, more than offsetting the 39,000 drop in employment in the public sector, suggesting companies are creating enough jobs to counter state redundancies. Youth unemployment has also fallen, down by 29,000 over the latest quarter to 1.01m. Employment rose 166,000 to 29.3m, the biggest increase since June-August 2010 with gains in full-time and part-time work nearly equally split. But other figures from the Office for National Statistics showed that the number of people unemployed for more than a year increased by 30,000 to 886,000. The number of people unemployed for more than two years rose by 29,000 to 434,000. There were 9.23m economically-inactive people in the three months to April, a fall of 69,000, mainly due to a reduction in the number of students. The UK's jobless rate compares with 8.2pc in the US, though it is well below the 11pc in the euro region, where property busts in Spain and Ireland shattered the labor-intensive house-building industry. It is also below the peaks reached after recessions in the early 1980s and early 1990s, when unemployment climbed above 10pc. That suggests firms have hoarded workers, leaving scope for a renewed round of job shedding if the recovery proves weaker than anticipated. Annual pay growth quickened to 1.4pc in the three months through April from 0.9pc in the three previous months, Wednesday's figures showed. Pay growth stripping out bonuses accelerated to 1.8pc from 1.6pc. Inflation slowed to 2.8 percent in April, figures showed on Tuesday. Philip Shaw, an economist at Investec Securities, said ahead of the figures: "Looking ahead much depends on the eurozone crisis and the effect this exerts on the UK economy. The message is the economy is not growing, perhaps contracting.