Commentary on the labour market statistics for September to November 2017

 

The estimated employment rate of 75.3%  has increased by less than one percentage point compared to the previous rolling quarter in 2017 and compared to the same period in 2016.

On average, for the period covered by the data, employees earned £480 per week before tax. This has increased by £11 since the same period in 2016. However, earnings are not keeping pace with inflation. In the last year, regular pay for employees has fallen by about half a percent when adjusted for prices. Since Brexit, a weak sterling has contributed to the rising costs of living. However, sterling has stabilised somewhat since last summer, so it will be interesting to see whether the trend of inflation outstripping earnings growth will continue.

The unemployment rate, standing at 4.3%, is now at a very low level compared to the long-term trend. It has not been lower since 1975.

The percentage of the UK population of working age who are defined as economically inactive (for example, people studying full-time or retirees) is around 21.2%. This is the lowest it has been since the 1970s.

So there is good news about the number of people at work, but the trend of wages relative to prices is concerning.