The seasonally adjusted Live register rose by 3,300 to 426,700 in December the highest level in almost 15 years, new figures from the Central Statistics Office (CSO) showed today.
Unemployment rose to 12.5 per cent in December, a 0.1 per cent rise on the 12.4 per cent recorded in the third quarter of the year by the Quarterly National Household Survey.
The CSO said the number of people signing on rose 46.1 per cent in 2009, compared to an increase of 119,642, or 0.2 per cent, in 2008.
However, the rate of increase during the month slowed compared with a year earlier. The average net weekly increase was 825 in December 2009, compared to 4,000 in the same month in 2008.
An increasing number of men signed on during the month, with the seasonally adjusted figures showing an additional 2,900 males and 500 females.
Throughout the year, the number of men signing on to the Live register rose by 88,273, or 45.4 per cent, compared with 45,304 women, a rise of 47.5 per cent.
Labour leader Eamon Gilmore said the increase cast "serious doubts" on Taoiseach Brian Cowen's claims that the recession has bottomed out and accused the Government of indifference.
"Apart from the huge economic cost of unemployment through loss of tax revenue and additional social welfare payments, there are also potentially huge social consequences," Mr Gilmore.
"We have a growing number of people who have spent more than 12 months of the Live Register and we are again facing the awful prospect of long term unemployment. We know the damage done to families and communities by long term unemployment during the 1980s and if we want to avoid a repeat of this phenomenon urgent action is now required."
Fine Gael enterprise spokesman Leo Varadkar said Ireland was a long way from turning the corner, and would not do so until unemployment was reduced.
"The Government has become obsessed with balancing the books and the banks, and has done nothing about the collapse of the real economy and the on-going haemorrhage of jobs," he said.
He called on the Government to introduce a job creation and job retention package that includes a cut in employers' PRSI, measures to reduce the cost of doing business, the provision of 30,000 education and training places for the young unemployed and a work-share scheme.
Chief economist with National Irish Bank Ronnie O'Toole said there were increasing signs that the rapid deterioration witnessed in the labour market was ending.
"Most obviously, the rate of unemployment in December 2009, at 12.5 per cent, is little changed from July. There is corroborating evidence to suggest that this is not just a blip," he said.
" These signs of a stabilisation in the labour market have been somewhat surprising. It had been assumed that unemployment would only respond to an economic stabilisation after a delay of around half a year."
Mr O'Toole said the jobless rate was close to the top of the cycle, and would gradually reduce over the course of 2010 as fewer people actively participating in the labour market, opting for early retirement and enrolling in further education instead.
The Irish Small and Medium Enterprises association (Isme), said job losses would continue in significant numbers unless the Government stepped in.
The group's chief executive Mark Fielding described the figures as "horrendous".
"With many small businesses currently faced with exorbitant costs, a reduction in consumer demand, late payments and a difficulty in accessing bank credit, the indications are that many will be reducing investment and employment over the next number of months, unless immediate Government action is taken to address these concerns," he said.
However, Mr O'Toole said Ireland still has more people in employment compared to other european countries, despite the State having a higher unemployment rate than the rest of the euro zone.
"In Europe, a high rate of unemployment has been a reality for a number of years, discouraging people from entering the labour force," he said.
Economist with Goodbody stockbrokers Deirdre Ryan noted that the rate of increase in the Live Register was at a 15-month low.
However, she also noted that the biggest factor contributing to the stability of this rate was the reduction in the labour force and increasing outward migration.
"The fact that a number of claimants may be exhausting their benefit entitlements (unemployment assistance may only be received for one year in certain instances) and therefore are removed from the Register once this occurs is also playing a role in the moderating rate of increase, although this is difficult to quantify," she said.
The Irish Congress of Trade Unions (Ictu) said the figures were a "worrying confirmation" that the Government's deflationary strategy was not working.
Assistant general secretary Sally Anne Kinahan said a stretgy of cutting pay would lead to more job losses:
"Congress warned that the pay cutting agenda would simply take more money out of the economy and ensure that more jobs are lost. Unfortunately, that fear appears to be borne out by these latest figures," she said.
"We are now on the cusp of a very dangerous and damaging deflationary spiral, in which more jobs will be lost, tax revenue continues to fall and more people will be forced to rely on social welfare."
Goodbody predicted further job losses in 2010, forecasting a 4.7 per cent decline in employment in 2010economists agreed that the unemployment peak is edging closer.
Ulster Bank economist Lynsey Clemenger said the figures were weaker than expected but said the underlying trend was one of improvement.
"Less negative trends have also been evident in unemployment rate developments in recent months. The rate hit a current cycle high of 12.5 per cent in December, and is therefore still on an upward trajectory," Clemenger said.
"However, the pace of increase has fallen back considerably. Indeed over the last six months the unemployment rate has continued to rise, but the 0.5 percentage point (pp) increase between June and December of this year represents a notable deceleration on the 3.5pp rise over the course of the previous six months."
Ulster Bank predicted peak unemployment rate would be closer to 13.5 per cent.
Bloxham economist Alan McQuaid noted that there was no indication that employers were hiring more staff.
"Indeed, it is hard to see job prospects getting better unless the banking system is stabilised, and money is flowing freely back into the economy again," he wrote in a note.
"And when things do start to pick up again on the employment front, it is likely to be the high-skilled chemicals and technology sectors that lead the way with other sectors lagging behind. The prospects for non-skilled workers remain bleak for the foreseeable future in our view."
