Latest official jobs figures paint a mixed picture

The Office for National Statistics has released the latest set labour market data, mostly covering the three months to April this year. The headline labour market figures look slightly better than those in recent months, with total employment 24,000 higher than the previous quarter, total hours worked on the up and total unemployment down 5,000. There has also been an encouraging increase in job vacancies (reducing the average number of unemployed people per vacancy to below 5 for the first time for several years) while the number of people claiming jobseeker’s allowance has fallen by 8,600. The rate of growth in total weekly earnings has jumped from a paltry 0.6% to 1.3%. However, the underlying picture is more mixed.

The number of men in work has fallen by 14,000 with a further 63,000 men becoming economically inactive – the headline fall in male unemployment of 12,000 therefore masks a weakening labour situation for men. By contrast, the number of women in work has increased by 38,000 but this has coincided with a quarterly rise in female unemployment of 7,000, mainly because 33,000 stay at home mums entered the labour market. Similarly, the number of over-65s in work has increased by 38,000 – taking the total number of people in employment in this age group above 1 million for the first time – while employment amongst 16-24 year olds has fallen slightly (down 4,000). For men and women as a whole, the number of people long-term unemployed (i.e. jobless and looking for work for more than a year) increased by 11,000.

Private sector employment has increased by 46,000, driven by 21,000 more people becoming self-employed, but public sector employment continues to fall (down 22,000 in the first quarter of the year). Moreover, for the economy as a whole, the number of people being made redundant has increased. The underlying rate of fall in public sector employment continues to be slightly lower than Office for Budget Responsibility projections. This suggests either that the rate of public sector job cuts will accelerate between now and the General Election in 2015 or that the final net loss of public sector jobs will be somewhat lower than currently expected.

The regional pattern of ups and downs in the labour market is also mixed, with the West Midlands being the big loser in the latest quarter (the latter region suffering a fall in employment of 43,000 and an increase in unemployment of 19,000). But the UK’s ‘Celtic fringe’ is having a much better 2013, in marked contrast with the jobs drought outside of England in 2012. Employment is up by 43,000 in Scotland, 10,000 in Wales and 24,000 in Northern Ireland.  Unemployment is down in Scotland and Northern Ireland and unchanged in Wales.      

The improvement in pay growth is also slightly deceptive. Stripping out the effect of very large spring bonus payments for some workers in the private sector, the underlying rate of growth in weekly earnings (i.e. regular pay) remains weak at 0.9% and still well below the rate of price inflation.

Taken together, these mixed jobs figures suggest the UK labour market is experiencing a modest improvement compared with recent months, which is consistent with broader evidence for the economy as a whole. But the news is better for some groups of workers than others and with unemployment still at 7.8% and real pay being squeezed the hard slog continues for people at work and job seekers alike.