Was there any bad news in today’s labour market numbers? if you were looking for it, it would be the fact that pay, rising by 1.6% (1.8% excluding bonuses) is still running below inflation, 2.6%. Or it would be that, at 8%, unemployment is still high, and much higher among young people.
But the big message from today’s figures is a positive one, with employment up by 201,000 over the April-June period to 29.48m, which is less than 100,000 below the pre-recession peak. Unemployment dropped by 46,000 to 2.56m, which is 8% of the workforce. Even the claimant count, which is being boosted by benefit changes, fell by 5,900 to 2.56m.
There may have been a small Olympics boost in employment in the figures, but it is absurd to suggest they are solely responsible for the rise. It is possible there has been a slowing in the pace of public sector job cuts (the next set of figures will be distorted by the reclassification of further education colleges).
But overall, the rise in private-sector driven employment and in hours worked – up strongly in the second quarter compared with a year earlier (more than 20m a week) is hard o reconcile with even a flatlining economy. Some can be explained by weakness in the energy sector, which is not closely linked to employment. Overall, though, it is a mystery. More here.
This post was originally published at David Smith’s EconomicsUK and is reproduced here with permission.