Best Buy extends deadline for founder bid

(Reuters) – Best Buy Co Inc agreed to extend the deadline to February 28 for founder Richard Schulze to make a bid for the company, continuing the uncertainty for shareholders over whether he can put a bid together.

Best Buy shares fell 14.2 percent to $ 12.12 on the New York Stock Exchange.

The company said on Friday the extension would allow Schulze to include the consumer electronics retailer’s full-year results as part of his due diligence review.

The new deadline will also give him more time to line up partners and financing for a bid. A source told Reuters on Thursday that Schulze didn’t have financing lined up in time for a December bid.

Schulze, who founded Best Buy in 1966, has said he would fund any deal through a combination of private equity and debt financing, as well as the reinvestment of some of his own equity in the company.

“Obviously with the extension, there is still some hesitation on the part of his private equity suitors about how much financing they would want to put up for this deal,” Morningstar analyst R J Hottovy said.

Under the extension, Schulze will be able to submit an offer any time during February, and the company will have 30 days to review and make a decision on the bid.

In August, Schulze made an informal proposal to acquire Best Buy for $ 24 to $ 26 per share, or a total of $ 8.16 billion to $ 8.84 billion. Including debt, it would be as much as $ 10.9 billion.

But Best Buy’s performance has continued to lag and its stock has slid since. Last month, the company reported a decline in same-store sales for the ninth time in the last 10 quarters.

Best Buy’s fortunes have faltered as consumers increasingly use its big box stores as showrooms for products they end up buying online at Amazon.com Inc and other websites.

To add to its troubles, the company forced out Schulze’s protégé, Brian Dunn, as chief executive earlier this year amid allegations he was having an inappropriate relationship with a female employee.

That scandal led to the ouster of Schulze from the board, and Best Buy hired turnaround expert Hubert Joly as CEO to come up with its own restructuring plan.

Schulze remains Best Buy’s largest shareholder with about one-fifth of the company’s outstanding shares.

If he can come in with a bid at about $ 16 or $ 17 a share when the market thinks the stock is only worth $ 12, it is in the interests of shareholders to extend the deadline, Hottovy said.

Others agreed.

“That’s really the best hope for investors, that Schulze takes it out because there’s been no other good news for the company,” said Rakesh Agrawal, principal analyst at San Francisco-based consulting firm reDesign Mobile.

Agrawal, who also advises hedge funds and money managers on the technology sector, said at this point the stock was trading entirely on whether a deal can get done or not.

A Best Buy spokesman said the extension will not affect the company’s day-to-day operations, especially during the all-important holiday season.

“We are determined to have a strong holiday season,” both in stores and online, spokesman Matt Furman said, adding that the company was moving “full speed ahead” with its turnaround plan.

(Writing by Brad Dorfman; Additional reporting by Olivia Oran in New York, and Siddharth Cavale in Bangalore; Editing by Jeffrey Benkoe)

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Cuban lawmakers meet to consider economy, budget

HAVANA (AP) — Cuban lawmakers are holding the second of their twice-annual sessions with a year-end report expected on the state of the country’s economy.

Legislators are also to approve next year’s budget.

Cuban leaders have sometimes used the parliamentary gatherings to make important announcements or policy statements.

Observers will be watching for word on the progress of President Raul Castro‘s economic reform plan and efforts to promote younger leaders.

The unicameral parliament will reconvene in February with a new membership following elections. It is then expected to name Castro to another five-year term.

State-run media said Castro presided over Thursday’s session.

It was not open to international journalists.

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Documents: Prisoner plotted to kill Justin Bieber

LAS CRUCES, N.M. (AP) — An imprisoned man whose infatuation with Justin Bieber included a tattoo of the pop star on his leg has told investigators in New Mexico he hatched a plot to kill him.

Court documents in a New Mexico district court say Dana Martin told investigators he persuaded a man he met in prison and the man’s nephew to kill Bieber, Bieber’s bodyguard and two others not connected to the pop star.

He told investigators that Mark Staake and Tanner Ruane headed east, planning to be near a Bieber concert scheduled in New York City. They missed a turn and crossed into Canada from Vermont. Staake was arrested on an outstanding warrant. Ruane was arrested later.

The two men face multiple charges stemming for the alleged plot.

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U.S. faces task of running dozens of health exchanges

WASHINGTON (Reuters) – Fourteen U.S. states and the District of Columbia so far have told the federal government they plan to operate healthcare exchanges under President Barack Obama‘s reform law, leaving Washington with the daunting task of creating online marketplaces for at least two-thirds of the country.

On the eve of a federal deadline for states to say whether they will run their own exchanges, a top U.S. healthcare policy official told lawmakers that the exchanges will start enrolling eligible families starting on October 1, 2013.

“I am confident that states and the federal government will be ready in ten months, when consumers in all states can begin to apply,” Gary Cohen, director of the Center for Consumer Information and Insurance Oversight, told a health oversight panel in the U.S. House of Representatives.

Cohen, whose agency is part of the U.S. Department of Health and Human Services (HHS), was among federal officials who testified alongside state health authorities at a hearing of the House Energy and Commerce Subcommittee on Health.

In written testimony, Cohen said 15 states have told the administration they will operate their own exchanges. He later explained under questioning that the count comprises 14 states and the District of Columbia.

Separately, HHS officials confirmed the count of 14 states but could not immediately explain why Cohen’s written testimony contained a higher number.

Some experts say the number of states planning to operate their own exchanges could reach 18 by the time the deadline arrives Friday. Still, the nonpartisan Kaiser Family Foundation, which tracks healthcare issues, says only two states – Utah and Florida – remain undecided.

That would leave at least 30 states in which the administration would be required to run exchanges, a challenge that is raising questions about how successfully U.S. officials can implement a key provision of the healthcare reform law, known to opponents and advocates alike as “Obamacare”.

“I don’t envy them for the job that they have,” said Dennis Smith, a former federal healthcare official who now heads health services in Wisconsin, a state that has decided not to pursue its own exchange.

“At the end of the day, you’re trying to connect a buyer to a seller. And the fundamental things required to do that are not yet in place,” he said.

The Patient Protection and Affordable Care Act, which Obama signed into law more than 2-1/2 years ago, is expected to extend health coverage to more than 30 million uninsured Americans. Those who enroll starting in October would be covered by insurance from January 1, 2014.

POLITICAL THEATER

About half of those newly insured individuals would purchase private coverage from online exchanges at federally subsidized rates. Ultimately, the number of people finding coverage through exchanges is expected to reach 26 million, according to the nonpartisan Congressional Budget Office.

The remainder would be covered by expanding the Medicaid program for the poor to cover all adults earning up to 133 percent of the federal poverty level, or about $ 15,000 for individuals and $ 30,600 for a family of four.

Thursday’s hearing provided a political stage for partisan rhetoric about Obama’s health reforms, which have survived repeated Republican repeal efforts, a nail-biting consideration by the Supreme Court and the Presidential election campaign.

Republicans and state officials from Republican-led states complained about compliance costs and accused HHS of delaying the release of vital details and rules needed to move forward on the exchanges and on the planned Medicaid expansion.

“The uncertain regulatory environment and the overall lack of response from HHS are not encouraging the states or the health plans to move forward,” said Representative Michael Burgess, a Texas Republican.

In response, Congressional Democrats and their state allies stressed the law’s benefits for senior citizens, protections for young adults and the sick, and the prospective economic benefits from an expected influx of billions of dollars in federal money.

“The (Republican) move now is to delay implementation under the guise of lack of information,” said Representative Frank Pallone, a New Jersey Democrat.

“The world in fact is not coming to an end,” he added. “The nation will be better because of the Affordable Care Act.”

States that don’t run their own exchanges would opt for one of two alternatives: a federally facilitated exchange that requires minimal state participation, or a federal partnership exchange in which states help by performing certain duties.

Kaiser Family Foundation expects six states to choose the partnership option and two dozen to opt for federally facilitated exchanges. Cohen said the count so far is four partnerships and seven facilitated exchanges.

States have until February 15 to say whether they intend to seek a federal partnership exchange. Four have done so already, Cohen said.

The administration will have to engineer an information technology system capable of processing operations in a way that meet the needs of healthcare consumers in different states.

Experts say the biggest challenge will likely be providing adequate customer service to handle enrollment, as well as fielding a technology system capable of interfacing seamlessly with the system of each state government.

Cohen told the panel the administration is building a website with interactive capabilities and a call center and has begun testing a data services hub to determine eligibility.

(Reporting by David Morgan; Editing by Ros Krasny, Jilian Mincer, Nick Zieminski and David Gregorio)

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With SolarCity IPO, Elon Musk May Get Clean Tech Right

Over the past few years, Silicon Valley has pumped hundreds of millions of dollars into a vast array of “clean technology” companies. You probably can’t name many of them because, on the whole, they’ve been tremendous failures or totally underwhelming. Companies participating in particularly difficult areas such as solar have turned into laughingstocks and symbols of huge investments gone wrong.

There does, however, seem to be one person getting quite wealthy off green technology, and that’s Elon Musk, the chief executive of Tesla Motors (TSLA) and the chairman of SolarCity (SCTY). When SolarCity began trading on Thursday, its shares jumped more than 50 percent in early trading (although the company had lowered its IPO price in recent days due to lackluster demand). Musk is now the largest shareholder in a pair of public clean-technology companies. (Going into the offering, Musk owned 31 percent of SolarCity, according to a Securities and Exchange Commission filing. That would be worth $ 150.8 million at the $ 8 offering price. A second filing said he intended to buy more shares at the offering.)

“It’s possible that Elon’s two clean-tech companies will be the two most successful clean-tech companies in the U.S.,” said Peter Thiel, the entrepreneur, investor, and Facebook (FB) board member in an interview earlier this year. Thiel is an investor in Musk’s SpaceX venture.

Instead of playing in the cutthroat world of solar-panel production, SolarCity, founded in 2006, focused on leasing solar panels to consumers and businesses and making this process easier. It helps people calculate how much money they can expect to save with solar panels, sets up the financing, and coordinates the installation of the panel. Through the first nine months of the year, SolarCity brought in $ 103 million of sales. Its business has been booming, although the company has yet to turn a profit and is likely to see a number of the state and federal tax credits from which it benefits decline over time.

What makes Musk’s clean-technology empire intriguing are the ways in which he intertwines the businesses. Tesla, for example, has begun building out a network of solar-powered charging stations for its cars. People can drive long distances—San Francisco to Los Angeles, for instance—and refuel their Model S sedans for free using a type of superfast charger. Musk has pledged to keep this refueling service free “forever,” and it is SolarCity that helps set up the stations. Beyond this, Musk plans soon to unveil what he’s describing as a “new mode of transportation” that sounds like some kind of solar-powered, super-fast tunnel called the Hyperloop. (He describes it in some detail here.)

Musk helped come up with the business plan for SolarCity, which was then founded by his cousins, CEO Lyndon Rive and Chief Technology Officer Peter Rive. All the men grew up near each other in Pretoria, South Africa, where Musk led them on a variety of entrepreneurial ventures, including selling Easter eggs door to door. Their mothers were born in Canada, and at about age 15, Musk hatched a plan to move the entire clan to the U.S. after first obtaining Canadian citizenship. “Without Elon I would be stuck in South Africa,” Lyndon told me in an interview earlier this year. “His ability to help us leave the country was amazing.”

Lyndon eventually obtained his green card for the U.S. through his skills as an underwater hockey player. (Yes, this sport exists.) “The U.S. has this green card category for people with exceptional abilities, like if you’re really good at sports or an actor,” Lyndon says. “I’ve been playing the sport since I was 14, and to get the exception you have to prove that you’re one of the best players in the world.” Both Lyndon and his wife have played for the U.S. National Underwater Hockey team.

Once in the U.S., the Rive brothers started a data center software company called Everdream, which Musk bankrolled. Dell (DELL) eventually acquired the company for $ 120 million. The cousins took the money, gave their next venture a think, and all settled on SolarCity.

Both Tesla and SolarCity have their challenges. Tesla has just started pumping out its new Model S sedan at a regular rate. The good news is that it has thousands of back orders to fill. The bad news is that it needs to produce the machines profitability and reliably. Earlier this month, Musk revealed that Tesla had enjoyed a week of positive cash flow. Still, Tesla remains one of the most shorted stocks on the market, with big-time investors betting that Musk will fail. Mitt Romney drove this point home during the presidential debates, describing Tesla as a “loser.”

SolarCity has installed panels at more than 45,000 buildings and been at the forefront of an era when getting this type of technology put on a home or office became much, much easier. “Clean energy has taken a big hit, primarily on the solar side, because of a lot of the companies there were producing a commodity,” Lyndon says, referring to the solar-panel and substrate makers. “The stocks were overhyped because of overdemand and undersupply, and then supply caught up. This should not be a measurement of the market’s willingness to adopt clean energy. The market adoption is almost doubling every year.”

Businessweek.com — Top News

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The Hobbit: Richard Armitage Talks Preparations For Playing Thorin Oakenshield

British actor Richard Armitage admitted it wasn’t a walk in the park to play a J.R.R. Tolkien character in Peter Jackson’s reimagining of “The Hobbit,” the first installment of which is on its way into theaters.

Upon touching down in New Zealand, where the trilogy was shot, the cast had a lot of character preparation to do.

PLAY IT NOW: Martin Freeman Discusses The Hobbit’s ‘Good Chemistry’ & Playing Bilbo Baggins

“We arrived in February 2011 and we went straight into a training program, which was called ‘Dwarf Bootcamp,’ which was literally boots — these huge boots. We learned how to walk, we wrestled with each other, we did archery together, we did sword fighting, hammer fighting, horse riding — everything you could possibly think of,” Richard, who plays Thorin Oakenshield in the film told Access Hollywood at the film’s junket.

In addition, the cast, which includes his former “Cold Feet” co-star James Nesbitt as Bofur, found ways to get to know each other better off set.

VIEW THE PHOTOS: The Hobbit: An Unexpected Journey — New York City Premiere

“We went round to each other’s houses and we cooked food together, we went to the pub and got drunk together, so there was an incredibly great bonding time between the dwarves,” he said.

Richard had plenty of experience sword fighting and horse riding in the BBC America series “Robin Hood,” but it was something else that came in handy during the long days on set.

“I’d done a number of shows where I’d had to use sword fighting and I’d also done horse riding. I’d also pulled guns out of my pocket. That was less useful,” he laughed, likely referring to his recent role in the PBS-import series “MI-5,” where he played a British spy. “But, yeah, you draw on everything. I’d worked at the Royal Shakespeare Company, so the vocal work was really useful to kind of pull that from there. I’d worked in a circus, there were… all sorts of things that were really useful, but the one thing that I do have — for lack of talent — is stamina and that’s the one thing I think everybody needed on this job.”

VIEW THE PHOTOS: Meet ‘The Hobbit’ Cast!

An imagination was useful also, but Richard said what turned out on the big screen was still wilder – and more beautiful – than he dreamed of.

“So many moments… Actually, apart from the eagles — which every single time I’ve seen this film absolutely blows my mind and I can barely keep the tears back and [it has] nothing to do with the pathos of the scene, just that feeling of flight moves me — is the throne of Aragorn, in the beginning of the prologue,” he told Access of the moment that moved him most. “When it got to [filming] that scene, I walked on and… it was just a green cross on the floor with a tiny green chair… [But in the film], they just made this incredible, almost space aged, sort of suspended seat in the middle of this stalagmite. It just blows my mind when I see that.”

VIEW THE PHOTOS: The Brit Pack: Hot Shots Of Stars From The UK!

“The Hobbit: An Unexpected Journey” hits theaters on December 14, 2012, followed by “The Hobbit: The Desolation of Smaug,” on December 13, 2013 and “The Hobbit: There and Back Again,” on July 18, 2014.

– Jolie Lash

Copyright 2012 by NBC Universal, Inc. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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AP PHOTOS: Top 10 Search Trends of 2012

NEW YORK (AP) — From the tragic to the downright silly, millions of people searched the Web in 2012 to find out about a royal princess, the latest iPad, a record-breaking skydiver and the death of a pop star.

Google released its 12th annual “zeitgeist” report on Wednesday. The company calls it “an in-depth look at the spirit of the times as seen through the billions of searches on Google over the past year.”

Here’s an Associated Press photo gallery of the top ten trending searches of 2012.

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“Lincoln,” “Les Miserables,” “Playbook” lead acting nominations

LOS ANGELES (Reuters) – Hollywood‘s actors cast their net wide on Wednesday, nominating performers from big awards contenders “Lincoln” and musical “Les Miserables” for Screen Actors Guild honors while also singling out the likes of Denzel Washington and Javier Bardem.

“Lincoln,” “Les Miserables” and comedy “Silver Linings Playbook” led the nominations for the SAG awards with four apiece, including the top prize of best movie ensemble cast.

Joining them with two nominations each were the cast of Iranian hostage drama “Argo” and, in a surprise choice, British comedy “The Best Exotic Marigold Hotel.”

The awards from the Screen Actors Guild are among the most-watched honors during Hollywood film awards season leading up to the Academy Awards because actors make up the largest voting group when the Oscars come around in February.

SAG voters focus on performances rather than directing and writing, meaning that action and effects-heavy films like “The Hobbit” are usually sidelined.

Consequently, SAG largely shunned the expected Oscar contender “Zero Dark Thirty” about the U.S. hunt for Osama bin Laden, giving it just one nomination for Jessica Chastain’s performance as a CIA agent.

But the latest James Bond blockbuster “Skyfall” made it onto SAG‘s list, with nominations for its stunt ensemble and Spanish actor Bardem’s supporting turn as blond-haired villain Silva.

Other perceived Oscar-worthy movies, including slavery era Western “Django Unchained,” went unmentioned, while cult drama “The Master” had just one nomination – for actor Philip Seymour Hoffman.

Nicole Kidman made the best supporting actress list for her turn in the steamy but little-seen independent movie “The Paperboy,” while Britain’s Helen Mirren was recognized for her portrayal of Alfred Hitchcock’s long-suffering wife in “Hitchcock.”

The SAG awards will be given out in Los Angeles on January 27 in a live telecast on the TBS and TNT networks.

Golden Globe nominations are announced on Thursday and Oscar nominations will be revealed on January 10.

‘LINCOLN’ PICKS UP STEAM

“Lincoln,” director Steven Spielberg’s well-reviewed film about U.S. President Abraham Lincoln‘s battle to outlaw slavery, has been picking up multiple accolades from U.S. critics in the busy Hollywood awards season.

On Wednesday, it brought SAG nominations for lead actor Daniel Day-Lewis and supporting actors Sally Field as his wife, and Tommy Lee Jones as powerful Congressman Thaddeus Stevens.

Hugh Jackman was nominated for best actor while Anne Hathaway is in the race for her supporting role in the movie adaptation of hit stage musical “Les Miserables.”

Other actors nominated on Wednesday included the stars of quirky comedy “Silver Linings Playbook” – Bradley Cooper, Jennifer Lawrence and Robert DeNiro. John Hawkes and Helen Hunt also have a stake, for playing a disabled man and his sex therapist in heart-warming independent movie “The Sessions.”

“Being recognized by your peers is something I could only dream of happening and to be included in this group of actors is not only humbling but quite frankly, surreal,” Cooper, a first-time SAG nominees, said in a statement.

Washington, a two-time Oscar winner, was nominated for playing an alcoholic pilot in “Flight,” a role that has been largely overlooked in early critics award.

Perhaps the biggest surprise on Wednesday was “The Best Exotic Marigold Hotel,” the story of a group of elderly Britons who retire to a ramshackle Indian hotel.

The film, which boasts a strong British cast including Judi Dench, Tom Wilkinson and Bill Nighy, had two nominations – best ensemble and best supporting actress for Maggie Smith.

Smith also was nominated in SAG‘s television category for her role as a sarcastic countess in period drama “Downton Abbey.”

The popular British show was among the picks for ensemble acting in the TV category.

Other TV drama nominations went to the casts of “Boardwalk Empire,” “Homeland,” “Mad Men” and “Breaking Bad.”

In TV comedy, old favorites “30 Rock,” “Glee,” “The Big Bang Theory,” “Modern Family,” “Nurse Jackie” and “The Office” were nominated for their ensemble casts.

(Editing by Xavier Briand and Bill Trott)

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Mind-body education helps irritable bowel syndrome

NEW YORK (Reuters Health) – Patients who go through a mind-body educational course are better able to manage irritable bowel syndrome (IBS), according to a new study.

The benefits of the course were modest, about as large as what are typically seen from taking medications, said Dr. Emeran Mayer, the senior author of the study and a professor at the University of California, Los Angeles, School of Medicine.

The program doesn’t work for everybody, said Mayer, but for others “it changed their lives.”

The researchers couldn’t describe exactly how patients’ lives were changed, but those in the study reported having somewhat less severe symptoms and a higher quality of life after they went through the program.

Irritable bowel syndrome is a collection of symptoms, including stomach pain and diarrhea, that don’t have a known inflammatory component like inflammatory bowel disease.

According to Mayer’s study, published in Alimentary Pharmacology and Therapeutics, up to 15 percent of people experience IBS.

Although fiber supplements, antidiarrheal drugs and antidepressants can be used to ease some of the symptoms of IBS, there is no cure.

Some studies have found success with talk therapy, meditation and hypnosis (see Reuters Health reports of November 1, 2011 http://reut.rs/uOYJ8l, June 29, 2011 http://reut.rs/kbJOwu, and May 4, 2010 http://reut.rs/h2R0Ac).

In the current study, Mayer and his colleagues developed a group education program, in which patients attended two-hour sessions once a week for five weeks. The discussions centered on the role of the brain in regulating digestion, how responses to stressful events can affect IBS, and strategies to better manage symptoms.

The researchers compared the symptoms, quality of life, and mental health between 34 people who went through the course to 35 patients who were told they were on a wait list.

By the end of the sessions, patients reported that the severity of their symptoms dropped from about 10 down to about 8 on a 20-point scale. And three months after the program ended, these patients reported that the severity of their symptoms was at about 7.

In comparison, the wait-listed group reported that their symptoms went from about 13 to about 11 at the end of five weeks, and down to about 10 three months later.

The researchers could not describe just what these changes mean in day-to-day terms.

Similarly, the quality of life for patients in the education group rose from about 67 to nearly 76 on a 100-point scale by the end of the sessions, whereas the quality of life reported by the wait-listed group had a small drop from about 64 to about 62.

Patients in the mind-body course also showed some signs of better coping skills. For instance, people were less likely make the worst out of a given situation if they had gone through the sessions.

ENOUGH THERAPISTS?

The findings are “part of larger set of data that says that the brain seems to be really important in the brain-gut interactions as they relate to IBS symptoms,” said Jeffrey Lackner, a professor at the State University of New York at Buffalo who was not involved in the study.

Lackner said it’s not entirely clear yet how meaningful the improvements on these measures will be to people’s everyday lives. He said that future research should explore just how much, in a practical way, patients’ lives change.

The changes seen after the educational program are not huge, Mayer said, but they would be noticeable to the patients. “I would prefer to see much larger changes,” he told Reuters Health.

Dr. Arnold Wald, a professor of medicine at the University of Wisconsin who was not involved in the study, said he’s not surprised to see that the program made some difference to people’s illness.

He explained that one of the premises of the mind-body approach to treating IBS “is that the mind and the body are linked, physically, neurologically, as well as emotionally, and that things that affect the mind can affect the gut and vice versa. So if you can do something to alleviate mind stressors, you can improve body functions.”

“Instead of when symptoms happen to them, saying, ‘I’m going to have the worst abdominal pain of my life and I’m not going to make it to this meeting,’…they can say, ‘I know about stress, I can rationally implement specific steps” to reduce it, Mayer said.

But whether such treatments will reach large numbers of people is unclear. Lackner said there are few therapists in the U.S. who focus on IBS.

Mayer’s group is developing online programs to help make his approach more accessible.

SOURCE: http://bit.ly/U8hjKn Alimentary Pharmacology and Therapeutics, online December 3, 2012.

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Big decline in UK unemployment

12 December 2012 Last updated at 08:54 ET

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The number of people out of work fell by 82,000 between August and October, to 2.51 million, official figures have shown.

It was the biggest quarterly fall in unemployment since 2001.

The unemployment rate was 7.8%, down 0.2 percentage points from the previous three months.

The Office for National Statistics also said that the number of people claiming Jobseeker’s Allowance fell 3,000 to 1.58 million in November.

Total pay was up 1.8% compared with the same period last year.

Employment rose 40,000 to 29.6 million, which was the highest figure since records began in 1971.

“We see more people looking for work and actually finding work, so I think there’s a really strong labour market there,” Mark Hoban, minister for work and pensions, told the BBC.

“I think there’s more flexibility in the labour market, although this month we’ve seen a big increase in full-time jobs and no movement at all in the number of part-time jobs.”

David Cameron was challenged in the Commons over “stubbornly high” long-term unemployment

Employment in the public sector fell for the 12th consecutive month, dropping 24,000 to 5.7 million, which was outstripped by a 65,000 rise in private sector employment to 23.8 million.

“The main disappointment was the fact that despite the gains in employment, there is no pick-up in wage growth, which remains at 1.8%, year on year,” said James Knightley at ING.

“The fact that UK employment is rising, consumer confidence is up and anecdotal evidence of retail sales haven’t been too bad, offers some hope that the domestic situation in the UK is stabilising.”

Among the details in the ONS report:

• number in full-time employment rose 44,000


• number in part-time employment fell 4,000


• unemployed 16-to-24-year-olds fell 90,000 to 626,000, excluding people in full-time education


• the biggest regional fall in employment was in Scotland, where it fell 27,000


• the biggest regional rise was in Yorkshire and the Humber, where it rose 48,000

Leader of the opposition Ed Miliband said long-term unemployment was still “stubbornly high” and the problem was of “fundamental importance… to the country as a whole”.

Continue reading the main story

Things seem to be getting better for young people looking for work. Or at least they are not getting worse. Alas, the same cannot be said for average earnings, which have actually now fallen even further behind inflation in October, with average annual growth of just 1.3%, less than half the rate of inflation.”

End Quote

Speaking at Prime Minister’s Questions, David Cameron said that while long-term youth unemployment was down 10,000, the problem showed the importance of the government’s Work Programme. However, “clearly, there is more to do,” he said.

Surprising strength

Many analysts have questioned why unemployment has not been higher, given the general weakness of the economy.

The flexibility of the workforce has been part of that, according to Ross Walker, UK economist at RBS, who points to the large numbers of part-time jobs in previous months, small rises in average wages and the increase in self-employment.

“None of that fully explains the gap – we would still have expected the labour market to have been rather weaker than it has been,” he said.

“Maybe actually, underlying growth is a little bit better than is being reported.”

BBC chief economics correspondent Hugh Pym said the Bank of England had admitted it did not understand why the labour market was so strong.

“They’re a bit worried about low productivity – in other words, more people in work, but not producing proportionally the amount that you would expect,” he said.

Shadow employment minister Liam Byrne: “We are absolutely not out of the woods yet”

“So is that a sign of a weak economy or an economy that’s got potential to grow in the future? They really don’t know.”

The Office for Budget Responsibility, which makes economic forecasts on behalf of the economy, last week cut its forecast for the peak rate of unemployment to 8.2%, although that still suggests a considerable increase in joblessness from the current 7.8%.

Shadow work and pensions minister Liam Byrne welcomed the fall in unemployment, but stressed that there was also bad news in the figures.

“Pay packets are under intense pressure as the pace of jobs growth slows down – wages are now growing at only half the rate of prices,” he told the BBC.

“Families are under real pressure right now and what today’s figures show is that the Department for Work and Pensions’ big back-to-work programmes are frankly delivering nothing.”

BBC News – Business

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