The Office for National Statistics (ONS) has released the latest set of UK labour market data, mostly covering the three months to December last year.
Today’s jobless figures proved to be one of those occasional statistical oddities that arise because of the way the ONS measures the headline unemployment number. The unemployment rate fell sharply from 7.6% to 7.2% in the three months to December 2013 when compared with the three months to September but the headline rate was slightly higher than the figure of 7.1% published in January which was based on a comparison of the three months to September with the three months to June. The ONS thus says that the main conclusion to be drawn from this is that the pace at which unemployment is falling appears to have slowed. But putting the statistical quirks to one side, the underlying trend in unemployment is firmly downward and the headline rate remains well on track to fall below 7% in the coming months.
Falling unemployment and a rise in job vacancies is now aiding all categories of jobseekers, including young people (youth unemployment was down 48,000 in the final quarter of 2013) and the long-term unemployed (down 45,000), while the problem of underemployment is also starting to ease slightly. The number of part-time workers who want a full-time job, while still above 1.4 million, fell by 29,000, with the entire 193,000 net rise in employment in the final quarter coming from full-time jobs (though again this was heavily weighted to self-employment which increased by 172,000).
Perhaps most significant of all, however, there are tentative signs of upward momentum in pay growth in these latest figures. Regular pay (excluding bonuses) increased by an annual rate of 1% in December, up from 0.9% in the previous month. The rate rose from 1.1% to 1.3% in the private sector and from 0.3% to 0.5% in the public sector. This isn’t yet anywhere near strong enough when compared to price inflation (running at 1.9% on the CPI measure in January) to end the real pay squeeze but the direction of travel is at last starting to look more encouraging.