New Labour Market Statistics
Authors: Ian Brinkley
20 January 2016
Overall, these are another very positive set of labour market statistics. There has been a big increase in employment, with resumed strong growth in self-employment. There has also been a significant rise in employee jobs, mostly full time and all of them permanent.
Unemployment is down again to just over 5 per cent. The Chancellor’s goal of full employment – which we define as 3 to 4 per cent unemployment as defined by the ILO – looks well within reach provided the economic recovery can be sustained. Most of Southern England (outside London) and the East Midlands are already at or very close to full employment on this measure. The challenge is now to secure sustained low levels of unemployment in the rest of Britain.
Wage growth overall is modest – about 2 per cent – but with inflation at zero this translates into real wage increases similar to those we saw before the crash. The pay hot-spot is construction, where regular weekly earnings are rising at over 6 per cent, likely driven by skill shortages; and the pay warm-spot is retail and hospitality with increases of between 3 to 4 per cent, likely due to firms anticipating the National Living Wage.
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