ONE in every eight people is now on the dole but the rate at which they are signing on has dropped dramatically.
A record 426,000 were on the Live Register at the end of 2009 -- but the number of new sign-ons each week fell to 825 last month.
That was an improvement from the 4,000 extra people joining the dole queues weekly in December 2008.
In total some 133,700 extra people joined the Live Register last year giving an annual increase of 46pc, compared with a 70pc upsurge during 2008, the latest figures from the Central Statistics Office (CSO) show.
Some analysts hailed the slowdown as evidence that the economy had turned a corner but others said the figures were a government failure.
Many small businesses were now "on their last legs" and many more jobs would go in the first months of this year unless the Government tackled the problem, the Irish Small and Medium Enterprises Association (ISME) said.
"The Government has decided to provide support to less than 1pc of businesses through the Enterprise Subsidy Scheme which completely ignores smaller businesses," said ISME chief executive Mark Fielding.
The CSO said the unemployment rate now stands at 12.5pc, meaning one in every eight people available for work can't find a job.
But this is better than some of the pessimistic forecasts earlier this year that unemployment would reach 17pc, said Alan McQuaid of Bloxham Stockbrokers.
The numbers signing on in December had increased by 3,300, but compared with a monthly increase of 16,000 in December 2008 it was "further evidence that things are improving on the labour market front," he said.
Goodbody stockbrokers analyst Deirdre Ryan said the 46pc annual increase was the lowest in 15 months, although outward migration was the main reason for the slowdown.
Ulster Bank's Lynsey Clemenger said that on average over the final three months of the year just 400 people a month were joining the Live Register, a "striking turnaround" compared to previous quarters "particularly compared with the unprecedented rise of over 25,000" in the first three months of the year.
She predicted unemployment would peak at 13.5pc this year.
Labour leader Eamon Gilmore accused the Government of indifference in the face of the unemployment figures and called for a €1.15bn fund to get people back to work. "These are by far the worst December Live Register figures ever recorded," he said.