Wednesday 19 October 2016

Small rise in level of UK unemployment should not be seen as ‘canary in the coalmine’ for future adverse effect of Brexit vote

The UK Office for National Statistics has just released the latest official jobs report, mostly covering the three months June to August 2016

There has been a small quarterly rise of 10,000 in the headline level of unemployment. This is disappointing news but should not be viewed as a ‘canary in the coalmine’ for any future adverse effect of the Brexit vote. Brexit may yet lead to a weaker jobs market but these latest figures are generally still very strong. 

The number of people in work increased by 106,000 in the quarter while vacancies remained fairly steady. Unemployment only increased because of a 116,000 quarterly increase in the supply of labour; the unemployment rate in fact remained unchanged at 4.9%. 

On the downside there has been a slight increase of 15,000 in the level of redundancies, but this will include continued public sector downsizing as well as any early confidence effect of the Brexit vote. Meanwhile the rate of growth in average weekly earnings excluding bonuses ticked up a bit to 2.3%, another positive sign albeit  the faster pace of consumer price inflation is now dampening growth in real pay.  

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