The number of people signing on for jobseekers' payments hit a new record high of 354,400 in February, bringing unemployment to a 10-year high of 10.4 per cent.
Last month the number of people signing on rose by 26,700, the second highest monthly increase on record, according to Live Register data released by the Central Statistics Office (CSO).
As a result there has been an increase of 164,952 people, or 87 per cent, over the last 12 months in the numbers signing on the register.
The increase in February is the second highest monthly rise behind January 2009 when 36,498 people joined the register.
More than double the amount of men, at 18,200, joined the register last month compared to the 8,500 women. The increase brought the standardised unemployment rate to 10.4 per cent the highest since October 1997.
The rising number of unemployed is undermining the public finances through lower tax receipts and increased social welfare payments.
Exchequer returns published yesterday show social welfare spending for the first two months of the year is running 8 per cent or €118 million ahead of 2008, largely due to the rise in the number of unemployment claims.
Rising unemployment also reduces the amount of income tax collected by the State. Income tax receipts are 7.4 per cent down on last year.
Rossa White, chief economist with Davy stockbrokers said the pace of layoffs in construction, retail and financial and business services had intensified early in the year.
However, he said it was important to recognise that the register includes a large number of part-time and casual workers that are not unemployed.
He is forecasting the unemployment rate to hit 12 per cent by October.
Lynsey Clemenger, Ulster Bank economist, estimates that each additional 10,000 workers on the live register costs the exchequer about €150 million in social welfare benefits and lost tax revenue.
As a result the increases over the last year have added in the region of €2.5 billion to the social welfare bill.
“We anticipate that the total claiming unemployment benefit will average 460,000 in 2009, which implies an overshoot in spending of €1.25 billion, and a tax loss of about half that again, compared with the January budget estimates.”
Isme, the representative agency for small businesses said the latest live register data were “dire” and said the Government should introduce an emergency employment action plan.
Mark Fielding, Isme chief executive, said with the cost to the State estimated at €20,000 for each individual in recipient of unemployment benefit “it is crucial that initiatives are introduced, as part of the supplementary budget, to ensure that employers can maintain employment during these extremely difficult times.”
Fine Gael enterprise spokesman Leo Varadkar called on the community employment schemes to be expanded in response to the job losses, but added that responsibility for running them should be handed over from FÁS to local authorities.
