Rising emigration likely to have played role in lower number of claimants, writes LAURA SLATTERY

THE NUMBER of people claiming unemployment benefits fell in September as hopes emerged that the jobs crisis may not prove to be as severe as had been expected.

However, rising emigration is likely to have played a role in the lower number of claimants, meaning the better-than-expected unemployment figures may not reflect improved conditions in the jobs market.

The Live Register of jobseekers' benefit and assistance claimants fell by 16,417 last month, according to the Central Statistics Office (CSO). The number of claimants traditionally plummets in September as schools and colleges reopen. When the figures were adjusted for this seasonal factor, the CSO calculated that the number of claimants increased by 600 to 429,400.

This was the lowest rise in the seasonally adjusted Live Register since April 2008, and it meant that the estimated rate of unemployment held steady at 12.6 per cent last month.

Fergal O'Brien, economist at employers' group Ibec, said the introduction of the Government employment subsidy scheme in September, combined with an improvement in global economic conditions over the summer, may have encouraged companies to retain jobs.

"The deterioration in Ireland's labour market has certainly stabilised," said Deirdre Ryan, economist at Goodbody Stockbrokers. The return of migrants to their home countries was the "central reason" behind the stabilisation in the unemployment rate.

The CSO will publish its latest breakdown on the number of non-Irish nationals receiving jobseekers' payments tomorrow. This number went into reverse in July.

Fine Gael employment spokesman Leo Varadkar said the figures could not be interpreted as a levelling off in the recession.

"The latest Live Register figures are no cause for celebration because workers are leaving the country or staying in education rather than signing on, and jobs are still being lost at record rates."

Labour Party employment spokesman Willie Penrose said there was "no grounds for complacency" in the Live Register.

"There must be a fear that the figures will begin to rise again as we enter the winter months," Mr Penrose said.

"Protecting jobs and putting people back to work must be a priority in the December budget. In particular, cuts to the capital programme must be avoided as this will simply dump more people on to the Live Register."

Bríd O'Brien from the Irish National Organisation of the Unemployed, said the Government "must start to treat the unemployment crisis as seriously as it has treated the banking one".

The number of jobseekers' payment claimants under the age of 25 fell by 1,800 on a seasonally adjusted basis and National Irish Bank (NIB) economist Ronnie O'Toole said this "noticeable drop" may indicate a rise in emigration among young people.

Simon Barry, economist at Ulster Bank, said the Live Register numbers had been consistently better than expected in recent months, indicating that the peak in the unemployment rate would be lower and reached earlier than previously thought.

"Forecasts of a peak of 16.5 per cent or more now, thankfully, look way too pessimistic . . . Based on the latest trends, something at or perhaps below 14 per cent now looks to be on the cards."