Employment rate highest since 1971
The Office for National Statistics has released its UK Labour Market Report, revealing the employment rate for October to December 2015 was 74.1%, the highest since comparable records began in 1971.
There were 31.42 million people in work, 205,000 more than for July to September 2015 and 521,000 more than for a year earlier.
There were 22.98 million people working full-time, 387,000 more than for a year earlier. There were 8.43 million people working part-time, 134,000 more than for a year earlier.
In comparison, the unemployment rate dropped 5.1%, lower than for a year earlier (5.7%).
There were 1.69 million unemployed people (people not in work but seeking and available to work), 60,000 fewer than for July to September 2015 and 172,000 fewer than for a year earlier.
There were 924,000 unemployed men, 116,000 fewer than for a year earlier. There were 766,000 unemployed women, 57,000 fewer than for a year earlier.
There were 8.88 million people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 88,000 fewer than for July to September 2015 and 172,000 fewer than for a year earlier.
The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.8%, lower than for a year earlier (22.3%) and slightly higher than the record low of 21.7% last recorded for July to September 1990.
Average weekly earnings for employees in Great Britain increased by 1.9% including bonuses and by 2.0% excluding bonuses compared with a year earlier.
Doug Monro, co-founder of Adzuna comments: “More people working, more full-time employees and higher wages all mark a strong and steady UK employment picture. Employer confidence is returning and businesses are investing in the expansion and retention of their workforce. For jobseekers this means higher average advertised salaries – which climbed to £33,322 in December.
“However, challenges lie ahead. The threat of a ‘Brexit’ will be on employer’s minds in the coming months, and companies are already making their voices heard. The movement of jobs abroad, such as those within HSBC could undermine the current steady market, as well as meaning Britain loses vital skills and key workers.
“But it’s always a two-way jobs market between Europe and Britain. A recent commitment to provide more jobs by Aldi for instance, is a sure sign that confidence in the British market, and British workers remains strong.
“And there’s also the important issue of a gender pay divide which is finally gaining the attention it deserves. It’s crucial that employers remain transparent and open to make sure all workers are getting a fair deal.”
Martin Li of CFD and FX broker XTB.com, expressed caution over the unemployment rate, stating “The latest UK unemployment rate remained unchanged at 5.1%, missing market expectations of 5.0% which signals that the pace of Britain’s recovery is slowing down. The weaker picture of the economy comes despite unemployment sitting at its lowest levels since 2006. Wage growth was in line with market expectations of 1.9%, down slightly from the previous print of 2.0%. Unemployment fell 60,000 between October and December to 1.69 million and employment climbed 205,000 to 31.4 million.
"Yesterday’s inflation numbers remain stubbornly low at just 0.3% yoy for the headline print. The core numbers also missed market expectations at -0.8% mom vs -0.7% mom, which has allowed living standards to continue to rise on average. The combination of both weaker employment and inflation sets the precedent and reinforces the view that the Bank of England will not consider increasing interest rates this year – and certainly not before the EU referendum. The sluggish wage growth is likely to be the key reason why the BoE is set to hold on interest rates, which fundamentally shows that the UK economy is not yet robust enough to handle higher rates. With a Brexit vote set to weigh heavily on market activity, Mark Carney’s appetite for an interest rate hike is likely to grow in the latter part of this year at the earliest.”
Neil Carberry, CBI Director for Employment and Skills, added, “While it’s encouraging that employment continues to rise strongly, lacklustre pay growth underlines the need for a pickup in productivity before wages can rise faster.
“Propelling innovation by broadening access to existing research and development (R&D) incentives and not adding to the cumulative burden on businesses, from recent Government policies, will help firms to create more jobs and boost productivity.”
John Salt, group sales director at totaljobs, commented, “While it is of course encouraging to see that unemployment has fallen to 5.1%, we need to recognise the importance of matching suitable candidates to positions based on their experience and aspirations.
"In totaljobs’ Employers Insight Report, published earlier this month, 68% of 100 businesses surveyed said they felt the job market is more candidate-led than in the last five years. This is reflected in jobseekers being more selective about their next move. Indeed, of the 4,000 jobseekers surveyed for the report, 65% said it has been more difficult to get a job compared to the last time they were looking for a new role.
"This isn’t to detract from the news coming out of the ONS findings, but to acknowledge that we should be utilising the wealth of talents available to the job market.”