The Office for
National Statistics (ONS) has this morning released the latest set of UK labour
market data, mostly covering the three months April to June 2015.
Although these quarterly
data refer to the spring and early summer they convey a picture befitting
August and the summer holiday season, since nothing much appears to have
happened.
Admittedly, the
number of people in work fell by 63,000 in the quarter to 31.03 million, while the
number unemployed increased by 25,000 to 1.85 million. But as the ONS notes the
employment rate (73.4%), the unemployment rate (5.6%) and the economic
inactivity rate (22.1%) were all ‘little changed’.
Nonetheless, this
is the second consecutive month of weak employment data, which suggests the UK
jobs recovery ran out of steam in the spring. What’s less certain is whether
this represents a temporary pause, perhaps due to employers’ caution over
hiring around the time of the General Election in May, or a clear break in the
previous trend of sharply falling unemployment. Either way it now looks as
though it will take a little longer than previously expected for unemployment
to fall back to the pre-recession rate (5.2%).
The most disappointing
feature of the latest data is that the apparent hiatus in the jobs recovery is
not offset by faster pay growth - the rate of growth of regular pay, excluding
bonuses, for employees remaining unchanged at 2.8% - which might have indicated
a pick-up in labour productivity. A combination of jobs standstill and lack of
momentum in pay therefore makes this the least positive set of UK labour market
figures for some considerable time.
