The number of people signing on the Live Register for unemployment benefits rose to another 10-year high last month, according to the latest data from the Central Statistics Office (CSO).
The seasonally adjusted Live Register total increased from 226,000 in July to 235,100 in August, the highest level since December 1998.
The figures show the numbers claiming benefits rose by 73,800 or 42 per cent in the 12 months to August - the highest annual increase on record.
As a result, the unemployment rate - the numbers out of work as a percentage of the labour force - has risen to 6.1 per cent in August from 4.5 per cent a year earlier.
Males accounted for 7,400 of the monthly increase which reflects the continuing slowdown in the construction sector.
Ulster Bank economist Pat McArdle said that while the annual increase of 73,000, the largest since records began in 1967, was likely to capture the headlines, such a comparison did not take into account that the labour force had doubled in size since then.
But he said the 0.3 per cent increase between July and August indicated that the pace of deterioration has stepped up recently.
He said: “It remains to be seen whether outward migration will ease the situation later in the year. So far, it appears that non-nationals are staying on the Register for the time being.”
The outlook is for further rises with the rate heading towards 8 per cent late next year, he added.
Davys stockbrokers said that males were still joining the Register at a faster pace than females, suggesting that layoffs in construction are continuing at a strong rate.
“According to our estimates, we are not even halfway through the secular shakeout in construction jobs,” it said.
Alan McQuaid, an economist at stockbroking firm Bloxham, said: “The poor Live Register figures are the third awful key number on the economic front in the past twenty-four hours following the sharp deterioration in the Exchequer finances in the first eight months of the year, and the record low hit by the services PMI in August.”
“The Government needs to respond to what is fast becoming an economic crisis and sooner rather than later. Failure to do so will in our view lengthen and deepen the extent of what is now very clearly a recession,” he said.
Ibec director general Turlough O'Sullivan said the economy was now in a much weakened position with all sectors struggling to come to grips with the major challenges including the credit crunch, the costs of doing business including energy, the dramatic downturn in construction and consumer confidence, currency pressures and competition from lower cost economies.
Fine Gael said the figures reflected “the true scale of Fianna Fáil’s botched economic policies”.
The party’s enterprise, trade and employment spokesman Leo Varadkar said the rate of unemployment could not be explained away by the global credit crunch and rising oil prices.
Mr Varadkar said: “Brian Cowen and his Cabinet need to stop blaming overseas factors and start accepting responsibility for an economic crisis which is largely of their own creation.
ISME, the Irish Small & Medium Enterprises Association, said urgent action from the Government was needed to prevent the labour market going into freefall.
Chief executive Mark Fielding said: “The reality on the ground is that, due to cost pressures, many small businesses are reducing working hours and wage rates in order to survive.”
“Others are being forced to let employees go, many of whom have been with the company for a significant number of years,” he said.
Labour's spokesman on enterprise, trade and employment Willie Penrose said: "Since January, the dole queues have been growing 1500 per week – but the Government has shown no sign of having any plan, or any sense of urgency."
"So far, their solution to the economic downturn has been to cut public services, in a ridiculous book-keeping exercise. They have no strategy to deal with the accelerating jobs crisis," he said.
