UK labour market statistics... still no change?
14 Jun 2017
Nigel Meager, director of the Institute for Employment Studies, comments on today's ONS Labour Market Statistics:
'The latest employment statistics from ONS cover the three-month period up to the end of April 2017, and on the face of it reflect a continuation of the story of the last few years.
'Put simply, the employment numbers are very strong, with a record high employment rate (74.8%), the unemployment rate (4.6%) the joint lowest since 1975, and total labour hours worked continuing to grow. Self-employment continues its remarkable upward trajectory (with 4.8 million people reporting that they are working for themselves, a growing number on a part-time basis). Hiring activity, at least as reflected in the number of unfilled vacancies, also remains at historically high levels, close to 800,000.
'However, several prices are being paid for this continuing success on the numbers in work. There is a further tightening of the ferocious squeeze on workers’ living standards, with a fall in real earnings as inflation picks up. It is difficult to believe that the lid can be kept on wages indefinitely and that the pressure building up here will not find an outlet soon (arguably a political outlet has already been seen in last week’s election results). Also, the UK’s dire labour productivity performance continues, as the employment growth figures are accompanied by the recent slackening of GDP growth.
'It is worth re-emphasising that while the economy has been resilient so far in the face of the unknown shape of the Brexit outcome, and has been bolstered in the short-term by the fall in Sterling, the picture could change very quickly as clarity emerges regarding the migration rules, trading and tariff arrangements associated with Brexit.
'It is probably too early to interpret the worsening of the single month employment figures in the ONS release as early signs of a downturn. The single month figures do not meet the criteria for official statistics, and they could well have been affected by one-off effects such as the Easter break. Their significance will, however, become clear in the months ahead.'
About the Institute for Employment Studies
The Institute for Employment Studies is a 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.