Sharp rise in number of inactive jobless cuts headline unemployment as private sector job creation falls

I have just had a quick look at the latest official UK monthly Jobs Report, mostly containing data for the three months August to October 2016, published earlier today by the Office for National Statistics (ONS).  

The UK labour market finally appears to be suffering a bout of post-Brexit vote blues which is now hitting recruitment. The number of people employed in the private sector has fallen by 17,000 and vacancies have leveled off, though an offsetting rise of 12,000 in public sector employment (mostly in education and the NHS) has limited the fall in both the overall job total and the employment rate, which is down a tick at 74.4%.

Despite this headline unemployment is down 16,000 to 1.616 million (a rate of 4.8%) on the quarter but only because the jobs slowdown is disguised by a sharp rise of 76,000 in the number of people out of work who are economically inactive. This masking effect of inactivity is particularly noticeable in the youth labour market, disguising a fall of 33,000 in the number of 18-24 year olds in work. The bad news on jobs is alleviated by a pick-up in the nominal rate of growth of average weekly earnings for people in work (now up to 2.6% excluding bonuses) albeit the real benefit of this is to some extent being offset by higher consumer price inflation. Whether one looks at jobs or real pay growth, therefore, the UK labour market looks to have entered a somewhat slower time.