Labour market stats September 2016

The latest statistics reflect continued strength in the labour market. There have been considerable gains in the number of workers in full-time jobs – 113000 more employees in full-time employment and 47000 more full-time self-employed workers over the quarter. The sectors that have grown most strongly have been distribution, hospitality, real estate, and the ICT sector. The substantial gains in employment are not, however, reflected in the unemployment statistics – the unemployment rate has fallen only very slightly over the last quarter and now stands at 4.9%. The numbers of economically inactive people, meanwhile, have fallen by some 92000. Numbers of inactive people not wanting a job have continued to decline, suggesting that there is further scope for employment to rise without putting pressure on wages.

The flat unemployment series disguises some substantial regional variations. Over the most recent quarter, there has been a sharp rise in unemployment in the West Midlands, but also significant falls in the East, and in both Wales and Scotland.

Wages continue to rise ahead of price inflation, but the rate of increase has moderated. Total pay is now growing at 2.3% over the year (compared with last month’s figure of 2.5%). The very high pay increases in the construction industry over recent months have now moderated, reflecting data on output and confidence in that sector.

These newly released data go to July of this year, and it is too early yet to pick up any effect of the Brexit vote.