The latest labour force statistics indicate a rise in unemployment of 20000 over the quarter to August-October this year, the unemployment rate now standing at 4.1%. Employment, however, has continued to rise at a healthy pace, with an increase in the numbers of full-time employees of some 100000. Moreover, the gradual shift from part-time to full-time employment has continued, as has the shift of activity from self-employment to employee status. Particularly notable is a decline of 40000 in the numbers of part-time self-employed workers. These trends all align with a narrative of continued adjustment to normality following the severe labour market disruption of the recession and slow recovery.

The data on pay continue to be encouraging. On the preferred three month measure, total pay rose at an annual rate of 3.3% in October, up from 3.1% the previous month. The less reliable single month estimate indicates growth of 3.9% – though this should be treated with caution because the base figure in October 2017 appears low. Nonetheless there does now seem to be some momentum building behind pay growth, and, real pay is now consistently growing – albeit still at a rate slower than the historical trend. This is likely to factor into Bank of England decisions on interest rates over the coming months, alongside the uncertainties surrounding Brexit.

geraint

About the author

Geraint Johnes

Professor of Economics, Lancaster University Management School