Commentary on the labour market statistics for August to October 2017

The latest labour force statistics provide further evidence that the labour market has peaked and is now starting to turn down.

December ONS labour market statistics  show employment fell by some 56000 over the quarter to October. While there was a small increase in the number of full-time employees, there was a large fall (some 65000) in the number of full-time self-employed workers. Unemployment, meanwhile, continued to fall, and now stands at 4.3%. The simultaneous fall in employment and unemployment is possible because there has been a large increase (115000 over the quarter) in the number of economically inactive.

There have been large falls in employment in the distribution sector (38000) and in information and communication (37000). Meanwhile numbers employed in professional, scientific and technical fields and in administration and support have increased.  

The three-month average measure of total weekly pay has increased to 2.5% (from 2.3% at the time of the last release). This is encouraging, but should be viewed alongside two further observations. First, wage growth remains well below the rate of growth of prices, so real wages continue to fall. Secondly, the single-month figure, while less reliable, is more modest – it has fallen to 2.3% from 2.8% last time around. So the growth in the three-month measure is largely due to a spike in September that has not fed through into October. Low, and stagnant, wages remain a problem.