Commentary on the labour market statistics for January to March 2017
The labour market statistics for January to March 2017, released today, report a welcome fall in unemployment (to 4.6%). However, the data on pay are less encouraging.
The latest labour market statistics indicate remarkably strong performance, with unemployment falling by 53,000 over the first quarter of the year to a rate of 4.6%. Indeed, unemployment has fallen in every region except London and the South East. This has been primarily due to a large increase in the number of full-time employees in employment (some 196,000 across the UK). The number of part-time employees has meanwhile fallen (by 61,000). There has been little change in the number of self-employed workers over the quarter.
On pay, the data are less encouraging. In the first quarter of the year, the year-on-year growth in total pay amounted to 2.4%. This is below the current rate of price inflation and indicates a renewed squeeze in real pay. The pay data indicate a collapse in wage settlements in the construction industry, and this is significant because much of the employment growth in the last part of 2016 came from that sector. While welcoming the strong employment growth evidenced in the first quarter’s figures, sustaining this into the longer term may therefore prove challenging.