Labour market recovery builds

Press Releases

16 Apr 2014

Nigel Meager, Director of the Institute for Employment Studies, comments on today's ONS Labour Market Statistics:

‘Today's statistics from ONS are, as expected, extremely positive. Coming as they do after more than 6 months of improving data, they confirm that the labour market recovery from the recession is now firmly entrenched.

‘All the main labour market indicators have moved in the right direction compared with the previous quarter, in some cases by significant amounts. In particular, the overall employment rate, at 72.6 per cent (a much better measure than the total employment number, usually cited by ministers) is now back at the level last seen at the start of the economic crisis.

‘Much of the recent growth has been in full-time employment, and, among part-timers, the numbers working part-time because they can't find a full-time job is starting to inch down. The unemployment rate has fallen below 7 per cent for the first time since late 2009. Long-term unemployment is also down, suggesting that the recovery is starting to benefit those groups furthest from the labour market.The fall in the youth unemployment rate is also to be welcomed, although it needs to be stressed that the strongest growth in employment is yet again among older workers (aged 50-plus).

‘The level of vacancies in the economy is strongly up, an indication of further pent-up demand from employers. The much lamented squeeze on real wages seems to be easing, with the gap between earnings growth and price inflation having almost closed, although it will take many months or years of earnings growth for the lost ground to be recovered.

‘There are, however, some unusual features of the labour market recovery, which are yet to be fully explained. In particular, the ongoing surge in self-employment continues apace. It is up by another 146,000 in the quarter to a new record of over 4.5 million. Over the last two years the number of employees grew by 3 per cent, but the number of self-employed by a dramatic 9 per cent. Key questions surround whether this reflects a wave of new business creation, or whether, as some have suggested, it mainly consists of a motley collection of freelancers aiming to keep a toehold in the labour market until they are able to return to regular employment. Most likely it is a mixture of both, but one notable feature of the recent self-employment growth has been the extent to which it consists of people working part-time (traditionally, the self-employed have tended to work much longer hours than employees). It is also worth noting that the self-employed are not included in the average earnings statistics published today, and some recent analysis of self-employed incomes suggests that they have fallen even more in the recession than those of employees.’


About IES

The Institute for Employment Studies is the UK’s leading independent, not-for-profit centre for research and evidence-based consultancy on employment, the labour market, and HR policy and practice.

About Nigel Meager

Nigel is a labour economist by training, and a well-established international expert on labour market and employment policy issues. He has worked at IES since 1984, following posts at the Universities of Bath and Glasgow. He has been Director of the Institute since 2004. He has a long and varied research track record covering the functioning of national, regional and local labour markets, unemployment, skill shortages, labour market flexibility, changing patterns of work and equal opportunity policies and practices.

For interviews or further information, please contact: Lorna Hardy: 01273 763 414 or

IES tweets from @EmploymtStudies