Wednesday, 18 February 2015

UK jobs recovery accelerates but underlying pay growth weakens

The Office for National Statistics (ONS) has this morning released the latest set of UK labour market data, mostly covering the three months October to December 2014.

The UK labour market recovery is continuing to bring good news to jobseekers but also continuing to disappoint wage earners.

The quarterly 103,000 rise in employment represents acceleration in the pace of job creation at the end of last year, helping to cut unemployment by 97,000 to a rate of 5.7%. With the number of people in work now close to 31 million the working age employment has risen to 73.2%, a joint record

But although the December bonus season pushed growth in total average weekly earnings above 2%, underlying pay pressure as measured by regular average weekly earnings (i.e. excluding bonuses and a better guide to the state of the labour market) fell slightly. Economy wide the underlying rate of growth of average earnings dipped from 1.8% to 1.7%. In the private sector the dip was from 2.2% to 2.1% and in the public sector from 0.8% to 0.6%. This suggests that the jobs rich economic recovery is still failing to boost labour productivity, which does not bode well for long-term improvement in UK living standards even if very low price inflation is at present helping to raise real incomes.



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