The Office for National Statistics (ONS) has this morning released the latest set of UK labour market data, mostly covering the three months June to August 2015.
It’s proving to be a topsy turvey year for the UK jobs market. The first six months were characterized by relatively slow employment growth, a fairly stable unemployment rate but much better pay figures, overall suggesting an improvement in labour productivity. However, between June and August the number of people in work leapt by 140,000 to 31.12 million, reaching a record working age employment rate of 73.6%, the unemployment rate fell from 5.6% to 5.4%, close to the pre-recession low, while the pace of regular (i.e. underlying) pay growth eased back from 2.9% to 2.8%.
The explanation for this apparent flip in behaviour is unclear, though it’s possible that recruiters were cautious in the first half of the year because of political uncertainty surrounding the General Election in May. What is clear is that hiring picked up strongly from June onward with the number of employees rising by 120,000 in the three months to August, full-timers accounting for more than half (70,000) this increase. Interestingly, this outcome contrasts with the popular narrative of recent months which explains the labour market trend at the start of the year in terms of mounting recruitment difficulties and increased competition for talent. Whatever the validity of this argument, employers don’t seem to have had too much difficulty hiring staff between June and August, and didn’t have to put more into regular pay packets to do so.