The UK Office for National Statistics has just published its monthly labour market report, mostly covering the three months to July 2017
The latest figures once again show a healthy
rise in employment (up 181,000 in the most recent quarter, to a rate of 75.3%), a further fall of
75,000 in the number of people unemployed (down to a rate of 4.3%) and 107,000 fewer economically
inactive (down to 21.2%), yet still no sign of any sustained upward momentum in the cash value
of average weekly earnings resulting in a 0.4% fall in real wages. This remains
a jobs boom without a feel-good factor.
Although the real wage squeeze caused by the inflationary
impact of the fall in the value of the pound is the most obvious symptom of
Brexit uncertainty on the labour market, there are signs of a Brexit effect in
the recent pattern of job gains and losses. The more competitive exchange rate
has given a boost to manufacturing jobs, up 34,000 in the second quarter, but
there are signs of weakness in the real estate sector where the number of jobs
fell by 34,000. The consequences of the real wage squeeze for consumer spending
may also be putting pressure on the arts, entertainment and recreation sector,
which shed 30,000 jobs in the quarter. This kind of mirror image effect could
be an early pointer to a post-Brexit future of winners and losers in the UK job
market.
