Unemployment in Scotland continued to fall in May

Employment statistics equalled a previous high set in 1992 showing 2.53 million people in work, an increase of 60,000 since last year.

The figures also show Scotland bucking the UK trend with a sharp fall in those classed as economically inactive.

Using the traditional method of calculating unemployment, May's total of 78,300 reflected a fall of 900.

While figures for the economically inactive rose by 120,000 at UK level, Scotland saw a drop of 23,000.

We enjoy one of the highest employment rates not just in the UK but within the EU Douglas Alexander Scottish Secretary

Statisticians found that 445,000 of the 619,000 in the inactive category, which includes students, the long-term sick or those looking after a family, were not seeking a job.

Scottish Secretary Douglas Alexander welcomed the figures and said they reflected the strength of Scotland's economy.

He said: "We enjoy one of the highest employment rates not just in the UK but within the EU.

"The fact that more Scots are looking for work and taking up jobs than ever before is testament to the success of programmes such as the New Deal delivered by this government."

'Arc of prosperity'

Despite the news, Enterprise Minister Jim Mather said they could not hide Scotland's under-performance in relation to other small countries.

He said: "The comparison with other small countries like Ireland, Norway and Iceland, which have enjoyed faster growth rates and lower unemployment, shows what we can achieve."

He went on: "We will need to address the problems of long-term unemployment and economic inactivity that continue to affect far too many people across Scotland if we are to join this arc of prosperity and reach our aim of increased, sustainable economic growth."

Official figures also show that the number of people working in the public sector in Scotland fell.

There were 580,500 working in the public sector in the first quarter of 2007 - down 4,900 or 0.8% - compared to the same period last year.

New approach

Despite the drop, the figures are still up 53,100 - more than 10% - since the onset of devolution in 1999.

It compares with almost two million workers who were employed in the private sector in Scotland in the first quarter of 2007.

Finance Secretary John Swinney admitted there is a "long standing debate" around the size of the public sector.

He said: "It's time for a new approach.