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Labour market slack remains

12 November 2014

Commenting on today's labour market statistics, Geraint Johnes, director at Lancaster University’s Work Foundation, said:

“The labour market statistics released today indicate continued strengthening of the economy. Employment has increased by 112,000 over the quarter, while unemployment has fallen by 115,000. This keeps unemployment at the 6.0% rate reported last month.

“Numbers of self-employed have fallen over the quarter by some 87,000, with 78% of these having been part-time. Meanwhile the number of employees has increased by 196,000, and 72% of this growth is in full-time employment. All these trends suggest that the labour market is gradually returning to normal, with fewer people in relatively insecure posts.

“Total pay including bonuses continues to rise only slowly, however, and are indeed still falling in real terms. Wage growth amounted to just 1% over the last year, well below the rate of price inflation. There are some signs of faster wage growth - again in manufacturing and construction - but nominal wages are falling in the distribution sector. Increased business investment should see productivity rise over the next few months, and real wage increases can be expected to follow that. But overall the picture remains one in which there is labour market slack, and we cannot on the back of that expect any tightening of monetary policies in the immediate future.”


Notes to editors

1. Geraint Johnes, director; and Ian Brinkley, chief economist are both available for interviews, blogs, briefings, analysis, and written comment.
2. The Work Foundation transforms people’s experience of work and the labour market through high quality applied research that empowers individuals and influences public policies and organisational practices. The Work Foundation is part of Lancaster University – an alliance that enables both organisations to further enhance their impact.

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