Latest job statistics: Is this as good as it gets?
20 Apr 2016
Nigel Meager, director of the Institute for Employment Studies, comments on today's ONS Labour Market Statistics:
'We should never put too much weight on one or two months' statistics, but the latest labour market figures from ONS raise the question of whether the UK's remarkable employment performance has reached its limits. Employment is still at record levels and still growing, but at a much slower pace than previously; all of the small growth in the last quarter was due to self-employment (the number of employees actually fell slightly) and unemployment has nudged up a little. The very rapid growth in employer vacancies seen in the last couple of years has slackened off, and earnings growth remains sluggish (although the figures do not yet, of course, incorporate the introduction of the new National Living Wage).
'It's too early to be sure, but the data could a reflect growing caution in hiring due to uncertainty about Brexit and/or the impact of the National Living Wage (the latter seems less likely given that self-employment, though still growing, has also flattened off in recent months). Alternatively, with an unemployment rate at around 5 per cent, the labour market may be reaching its current natural limit; if so, the focus of public policy needs to shift from reducing overall unemployment towards a greater emphasis on tackling worklessness among the most disadvantaged and economically inactive groups, including disabled people, some minorities and groups of young people. The next few months' figures should help make the picture clearer.'
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.
IES tweets from @EmploymtStudies
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.