Recovery Lifts the UK’s Job Market

These are the highlights from today’s labor market statistics:

– The employment rate for those aged from 16 to 64 was 71.6%, up 0.2 percentage points from February to April 2013 and up 0.4 from a year earlier. There were 29.84 million people in employment aged 16 and over, up 80,000 from February to April 2013 and up 275,000 from a year earlier.
– The unemployment rate was 7.7% of the economically active population, down 0.1 percentage points from February to April 2013 and down 0.4 percentage points from a year earlier. There were 2.49 million unemployed people aged 16 and over, down 24,000 from February to April 2013 and down 105,000 from a year earlier.
– The inactivity rate for those aged from 16 to 64 was 22.3%, down 0.1 percentage points from February to April 2013 and down 0.2 percentage points from a year earlier. There were 8.96 million economically inactive people aged from 16 to 64, down 33,000 from February to April 2013 and down 52,000 from a year earlier.

And if there was a downside, it was that total pay rose by only 1.1% compared with May to July 2012. Regular pay rose by 1.0% over the same period.

But these figures were very good, one measure of which is the claimant count: 1.4 million in August, down 32,600 from July and down 168,100 from a year earlier. The claimant rate has dropped to 4.2%.

Dr John Philpott of The Jobs Economist sums up the overall strength of these figuree well: “This is by far the strongest overall set of official UK labor market figures this year and indicates that the summer surge in economic growth was accompanied by a jobs surge. Not only did the number of people in work increase by 80,000 in the quarter, according to the household Labor Force Survey, but the ONS’s alternative quarterly survey of employers shows that businesses added 168,000 jobs between March and June. Moreover, all the net job growth was in full-time employment for employees on permanent contracts – the numbers of people working part-time, on temporary contracts or self-employed all fell.”

The question will arise about when the unemployment rate will drop to 7%, the threshold at which the Bank of England’s monetary policy committee will contemplate higher interest rates. These figures show that the rate has dropped from 8.1% to 7.7% over the past year, on the back of a 276,000 rise in employment. The figures are here.

This piece is cross-posted from Economics UK with permission.