Commentary on the labour market statistics for October to December 2017

The labour market statistics released today provide a mixed picture. The number of unemployed rose by 46000 over the last three months of 2017, so that the unemployment rate now stands at 4.4%.

The increased unemployment has been quite uneven across the UK, with marked increases in Wales, Scotland and the East but falls in some other regions. Meanwhile across the UK the number of workers in employment also increased, as a result of a fall in the numbers who are economically inactive. Of employees in employment, the numbers working full-time rose by 136000 while the numbers working part-time fell by 51000. There was a fall of some 41000 in the number of full-time self-employed workers. Overall these figures paint a fairly healthy picture, suggesting a continued reduction in underemployment and a restoration of the labour market towards patterns observed before the financial crisis.


The most eagerly anticipated data in the release concern pay. Total pay (on the official three month average measure) increased by 2.5% over the year to December. This rate of growth is unchanged over the last three months of 2017. There is some more encouraging news on pay in the (less reliable) single month figure, which increased from 2.3% in November to 2.8% in December. Whether this heralds an end to stagnant real pay settlements remains to be seen, since much of this improvement comes in the form of end of year bonuses, particularly in the financial services sector.