Commentary on the labour market statistics for February to April 2017

The labour market statistics for February to April 2017, released today, show a continued fall in the unemployment rate. However, pay settlements also continue to fall.

labour market statistics for February to April 2017 city

The latest labour market statistics show a continued fall in the unemployment rate, which, for the three months to April, stands at 4.6%. There has been a large gain in full-time employment over the quarter, with 196,000 more employees working full-time. Meanwhile, part-time employment has shrunk somewhat, with 69,000 fewer employees in this category. Amongst the self-employed there has been a fall of 24,000 full-time workers.

Taken together, all of this suggests that the labour market is continuing its gradual readjustment towards normality, with a general move towards more stable employment. That said, the number of part-time self-employed workers has increased by 26,000. While the overall picture is one of rising stability, there may be growth also of a less secure fringe.

Unemployment has fallen particularly sharply in the North East. This is a region that has recovered rapidly recently, having been hit hard by the recession. Unemployment in the North East now stands at 5.4%. Other recently released data also show a marked recovery in household incomes in this region. The region with the highest unemployment rate now is London, at 6%.

The news on pay is at least as bad as the news on employment is good. On the three month average measure, pay settlements fell from 2.3% in March to 2.1% in April. The fall in the single month measure is more dramatic – from 2.4% to 1.2% – though it should be noted that this measure is generally held to be less reliable. On the single month measure, there were falls in average weekly earnings in both the finance and construction sectors in April. There is no sector of the economy in which wages are currently rising as fast as prices. The squeeze in real wages is back, and there seems to be little prospect of an immediate recovery.