The number of people looking for work in South Tyneside has risen by almost 600 in the last six months.
The Jobseeker’s Allowance (JSA) claimant count has returned to almost exactly the same level it was a year ago.
There were 4,297 people claiming the benefit – paid only to those classed as officially looking for work – in the borough in January.
That represents a rise of 582 since July’s figure of 3,715 and a drop of just six year-on-year.
Across the North East, the number of people in work was up 28,000 over the year.
The JSA claimant rate still stood at 3.9%, almost double the national rate of 2.2%, but the number of people who have been claiming for more than two years has halved since January 2014.
Paul Carbert, policy advisor at the North East Chamber of Commerce, said: “This is very encouraging news.
“We’re very pleased to see the employment rate up 2.% over the quarter; this is the largest rise in the country for the second month running.
“Although unemployment has decreased, it still remains high compared to the rest of the UK.
“The number of people in our region aged 16 to 64 who are classed as economically active has risen over the quarter. This may be due to people re-entering the labour market after being on long-term sick, or caring for a relation who have not yet found work.
“Nevertheless, long-term unemployment is falling, so the North East is definitely heading in the right direction.”
North East LEP Chief Economist Chris Milne said the manufacturing and service industries were leading the way in job creation across the region, with 9,000 more jobs in manufacturing and 28,000 more in services.
“While we must not get carried away by short-term fluctuations in statistics, today’s labour market figures give us reason for optimism,” he said.
“We are seeing a longer term trend towards an improved labour market picture in the North East, driven by job creation in a broad range of sectors.
“Manufacturing job growth demonstrates growing demand for the things we produce in the region, and service sector job creation indicates broader economic growth and a sense of prosperity.
“Over the past year private service sector job growth in administration and support services and accommodation and food services has been particularly important, delivering 19,000 more jobs combined.
“The service sector will remain an important sector for economic growth of the region, and has more than compensated for public sector job losses over the past year.”