The drop in Ireland's unemployment rate is due to a new wave of emigration, retirement and people going back to school rather than an indicator of an improving jobs market, the Irish Central Statistics Office (CSO) claimed this week.

According to the latest figures released by the office, the number of people out of work has fallen from 14.8 percent to 14 percent, but the figure has fallen due to fewer young people in the jobs market.

The CSO figures show there were 295,700 people out of work in the first three months of the year, down by 3,300 since unemployment peaked at 299,000 in the second half of last year.

Jobs Minister Richard Bruton told the Irish Independent the CSO figures showed the scale of the challenge facing Ireland in getting people back to work.

“Emigration is now draining our country and our economy of some of our best and brightest people and we must do everything we can to create opportunities for them to stay here and contribute to our recovery,” he said during a trade mission to the US this week aimed at creating new IT jobs.

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The CSO figures indicate a dramatic surge in job losses in the hotel and restaurant sector, with over 21,000 jobs lost in the last year.

The number in the labor force, which includes those looking for a job - dropped by nearly 33,000 in 2010 to 2.1 million, with CSO adding that the drop is most pronounced amongst people in their 20's and early 30's.

Demographic changes including emigration would account for around 12,200 of the fall, but the CSO said they would not know what role emigration played until the Census results were out.

The Irish Business and Employers Association told the press that whilst the figures showed job losses were stabilizing, long-term unemployment was becoming a serious problem.

Jobseekers are now  out of work an average of more than 20 months - twice what it was two years ago. Jobseekers aged between 25 and 44 have been hardest affected by unemployment, accounting for 58 percent of the total in the first quarter of 2011.