MINISTERS said there were signs the jobs market was stabilising when the first drop in people claiming jobseeker's allowance for almost two years was announced today.

The claimant count shrank by 500 last month to 80,800, the first time it has fallen since January, 2008.

But unemployment in the three months to October rose 9,000 (0.6 per cent), the highest percentage rise of all nations and regions.

It takes the number of people out of work in Wales to 125,000, up 30,000 on the same time last year.

Deputy First Minister Ieuan Wyn Jones said: "With the first decline in claimant count unemployment since early 2008, the latest data shows some encouraging signs that the labour market is stabilising in both Wales and the UK as a whole.

"However, we remain cautious in over-interpreting the latest figures, especially the quarterly International Labour Organisation data (on unemployment), which has proved highly volatile during the year.

"We are also acutely aware of the impact unemployment can have on families and individuals – particularly at this time of year – and we remain resolved to continue our decisive action to support people and businesses through this difficult period."

Subsidised training places for the staff of struggling businesses under the ProAct scheme had saved more than 7,600 people from redundancy, he said.

Across the UK, youth unemployment reached a record high, with 952,000 people aged 16 to 24 out of work – a quarterly rise of 6,000 and the highest figure since records began in 1992.

Shadow Welsh secretary Cheryl Gillan said: "For the second month running nearly half of all jobs lost in the UK were in Wales.

"People will look at these figures and judge both Labour and Plaid Cymru on their record of failure to keep Wales working.

"This failure is all the more relevant as we approach Christmas."

She added: "We need a fresh approach to creating and protecting jobs, supporting businesses, investing in skills and training, and to get Wales and Britain working."