The Office for National Statistics (ONS) has this morning released the latest set of UK labour market data, mostly covering the three months August to October 2014.
These latest figures at last point toward the kind of jobs recovery most likely to begin to put some oomph into pay as well as employment. The entire 115,000 quarterly net rise in employment (to 30.8 million, 73% of the working age population) is driven by full-time jobs for employees which increased by 174,000, easily offsetting falls of 9,000 in the number of number part-time employees and of 29,000 in the number of people self-employed. Unemployment fell by 63,000 (to 1.96 million) in the quarter on the Labour Force Survey measure and by 26,900 in November when measured by the count of claimants of Jobseeker's Allowance. Long term unemployment (i.e. people jobless and seeking work for more than a year) dropped by 40,000 to 684,000, though by comparison the fall in youth unemployment (16-24 year olds) of just 2,000 to 754,000 is disappointing. Nonetheless the overall good news looks set to continue with the level of job vacancies rising by 10,000 to 690,000, just 6,000 short of the pre-recession peak. This means that there are now 2.8 unemployed people per job vacancy, down from 4.4 this time last year and 5.8 two years ago.
Longer hours jobs combined with falling unemployment has boosted the annual rate of growth of average weekly earnings (excluding bonuses) to 1.6%, higher than the comparable 1.3% CPI inflation rate for the period covered by the latest pay data. The increase in average weekly earnings is relatively strong in the private sector, with average weekly pay rising by 2%, thereby boosting employees’ real pay by 0.7%, though this still modest rate of pay growth remains unlikely to set alarm bells ringing at the Bank of England when it comes to decisions on interest rates. However, there is less seasonal cheer for public sector workers whose numbers fell by a further 7,000 in the latest quarter and whose average earnings are growing at a below inflation rate of just 0.9%. For the latter, the chill wind of austerity is biting as hard as ever.