The UK labour market’s performance at creating jobs continues in puzzling contrast on the lacklustre GDP growth which has characterised recent months. Employment will continue to expand strongly once again, and at a faster pace, pushing the two headline number and rate to new all-time highs.
Unemployment also is constantly on the fall, together with the rate one more time at its lowest since 1975, based on the CBI/Pertemps Labour Market update for September 2017.
But pay growth has waned again, leading to a fifth consecutive month by which wage growth hasn’t kept pace with rising prices.
For wage growth to safely move sustainably onto an increased path, it is crucial for productivity growth to get C productivity has fallen during the first 50 % of 2017.
Looking across the regions and nations, picture is mixed, with employment growth spread unevenly and few regions watching a statistically significant fall in unemployment.
Employment is escalating impressively, as well as at the swiftest pace since 2015
In these months to July 2017, employment growth accelerated to 181,000 and stands at 32.14 million (Exhibit 1), the biggest before. Every year, it rose by 379,000.
The employment rate also rose to the next record high, up from 74.8% to 75.3% about the quarter.
Employment growth was principally driven by employees, which increased by +147,000, when compared to a rise of +43,000 in self-employment, and little difference in the numbers classified as unpaid family workers (+2,000). There’s a small fall inside the numbers registered on government supported training and employment programmes (-11,000). Full-time employment rose by 96,000, with the numbers working part-time also rising by 86,000.
In terms of the age breakdown, employment grew fastest for those aged 25-34 yrs . old, (+127,000), with strong growth additionally those aged 50-64 yoa (+66,000) and the ones aged 35-49 years (+64,000). Employment fell for workers over 65 (-46,000), and for youth aged 16-24 years (-27,000).
In the age breakdown, employment grew strongest for people aged 25-34 yoa, (+127,000), with strong growth but in addition those aged 50-64 years of age (+66,000) as well as those aged 35-49 yrs . old (+64,000). Employment fell for workers over the age of 65 (-46,000), and then for young adults aged 16-24 yrs old (-27,000).
Unemployment continually fall, and it is now at its lowest rate since 1975
In a few months to July 2017, unemployment fell by 75,000, to at least one.45 million.
The unemployment rate dropped from 4.6% to 4.3% to the quarter, again for the lowest since 1975 (Exhibit 3).
The volume of vacancies to your period June-August 2017 remained high, despite falling by 7,000 on the quarter to 774,000.
In terms of the age breakdown, while in the three month to July 2017, unemployment fell quickest for all those aged 25-34 years (-42,000), 16-24 years (-36,000), and 35-49 years (-16,000). It rose modestly for the people aged above 65 (+13,000), with little change for anyone aged 50-64 yrs old (+6,000).
The unemployment rate for the people aged 16-24 yr old fell from 12.5% to 11.9%.
The fall in unemployment was into a substantial lowering of the quantity of near future unemployed (unemployed for just Half a year) which fell by 59,000 on the quarter. There was clearly and a fall in those unemployed for 6-12 months (-13,000). But there is little alternation in the volume of long-term unemployed over 12 months (- 3,000) and over A year or so (+9,000)
Wage growth remains depressed amidst higher inflation and low productivity growth
Real wages have right now fallen for five consecutive months. In the three months to July 2017, real regular pay (excl. bonuses) fell by 0.4% for the year (Exhibit 4). The autumn registered this month inside single-month rate was very slightly a lot more than the average across the previous 90 days (-0.5 vs -0.4%).
Nominal annual regular pay growth (excl. bonuses and before adjusting for inflation) was 2.1% during the ninety days to July 2017, the same as the with three months to June 2017.
Pay boost in the individual sector (2.3%) was unchanged within the ninety days to June 2017, but there was one small boost in pay growth in anyone sector within the same period, rising from 1.4% to 1.6%. Looking through the economy, nominal annual regular pay growth rose fastest while in the finance and business services sector (2.2%, up from 1.7%), even though the construction sector also saw pay growth strengthen from 1.7% to one.9%. But pay growth weakened in manufacturing (1.2% one.0%) and in wholesaling, retailing, hotels and restaurants (2.1% to one.7%).
It is vital that productivity is increased when we’re to determine sustainable pay growth, but the exact same thing, remains weak. In separate figures to the ONS labour market release, productivity (on an output on an hourly basis basis) fell by 0.1% in Q2 (Apr-June 2017) following a fall of 0.5% in Q1 (Jan- Mar 2017).
Employment growth just isn’t spread evenly over the UK’s regions and nations…
In the three months to July 2017, employment strengthened in the following regions (Exhibit 5): London (+88,000), East (+54,000), Scotland (+49,000), West Midlands (+36,000), plus the East (+11,000).
But it declined during the Free airline (-22,000), Wales (- 13,000), plus the North East (-11,000).
There wasn’t statistically significant improvements on its northern border West (+5,000), Yorkshire and Humber (-8,000), East Midlands (-8,000), and Northern Ireland (-1,000).
…and few regions saw a statistically significant fall in unemployment
In the months to July 2017, unemployment fell in London (-36,000), East (-13,000), and Yorkshire and Humber (-10,000).
There weren’t a statistically significant alteration of levels inside the The west (+9,000), North East (+8,000), Wales (- 8,000), East (-7,000), East Midlands (-5,000), North West (-5,000), Scotland (-4,000), West Midlands (-2,000), and Northern Ireland (-1,000).