Unemployment rate remains at 4.9%, reveals latest ONS figures
The Office for National Statistics has released its UK labour market statistics for June to August 2016.
Between March to May 2016 and June to August 2016, the number of people in work and the number of unemployed people increased. The number of people not working and not seeking or available to work (economically inactive) fell.
There were 31.81m people in work, 106,000 more than for March to May 2016 and 560,000 more than for a year earlier.
There were 23.23m people working full-time, 362,000 more than for a year earlier. There were 8.58m people working part-time, 198,000 more than for a year earlier.
The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.5%, the joint highest since comparable records began in 1971.
There were 1.66m unemployed people (people not in work but seeking and available to work), 10,000 more than for March to May 2016 but 118,000 fewer than for a year earlier.
There were 891,000 unemployed men, 12,000 fewer than for March to May 2016 and 81,000 fewer than for a year earlier.
There were 765,000 unemployed women, 23,000 more than for March to May 2016 but 37,000 fewer than for a year earlier.
The unemployment rate was 4.9%, unchanged compared with March to May 2016 but down from 5.4% for a year earlier. The unemployment rate is the proportion of the labour force (those in work plus those unemployed) that were unemployed.
There were 8.81m people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 65,000 fewer than for March to May 2016 and 231,000 fewer than for a year earlier.
The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.5%, the joint lowest since comparable records began in 1971.
Average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.3% both including and excluding bonuses compared with a year earlier.
John Salt, group sales director at totaljobs, commented, “In the face of plenty of turmoil surrounding the fall of the pound, the ONS figures continue to provide a reassuring perspective on the state of the economy. Businesses are continuing to hire – and this is reinforced by our Totaljobs Employment Index, which showed that the number of jobs posted on the site in September is up an impressive 7% year-on-year.
“However, there are still quite a few red flags that must be navigated. A number of businesses have made high-profile job loss announcements in the last couple of weeks, while a number of others are still warning that they may need to move jobs elsewhere. It will fall on the Government to continue to support businesses of all sizes so that they can keep on hiring, and keep the job market on this positive trajectory.”
Employment minister, Damian Hinds, said, “Once again it’s great news for Britain as the employment rate remains at a record high with more than 31.8 million men and women in work.
“But there’s more to do, particularly when it comes to supporting young people into employment. We want to build a solid base for the future, that’s why today I have announced the roll out of our Jobcentre Plus Support for Schools scheme in England which will give tens of thousands of young people help in taking their first steps into the world of work.”
CIPD acting chief economist, Ian Brinkley, stated, "Overall job growth has been strong, so in the short term the labour market remains resilient. There are some underlying weaknesses with most of the new jobs being part time and there has also been an increase in temporary work.
"The overall unemployment rate remains stable, but there has been a decrease in the number of people classified as economically inactive who say they want a job. More worrying is that youth unemployment has modestly increased, rising by 7,000 in the last quarter.
"However, it is still too early to read any Brexit impact into these figures, as they only cover the period to August. Any future impact is more likely to show up through a gradual slowdown, rather than a dramatic decline, as employers become more cautious about hiring.
"Regular pay has remained stable, with average weekly earnings increasing by 2.3 percent comparing the last three months with the same three months a year ago. However, as inflation is widely expected to exceed two percent next year as the impact of the pound's devaluation feeds through into prices, we could be heading for another period of very low or negative real wage increases for many workers."
Recruitment & Employment Confederation head of policy, Kate Shoesmith, commented, “The UK economy continues to perform well. The employment rate remains at a record high of 74.5 per cent, despite a small rise in the number of people unemployed, according to the latest official figures. The number of economically inactive people has fallen by 65,000. Our Report on Jobs data shows that permanent placements were in growth during August and September, so we expect to see these positive trends continue short-term. However, it’s too early to draw conclusions about the long-term effect of the referendum.
“Pay continues to grow at 2.3 per cent, but with inflation on the rise, the concern is whether wage growth can keep up further down the line.
“In June the number of public sector workers fell by 13,000. This has been steadily falling since 2010 and latest figures show that the number of people employed in the public sector is at its lowest since records began. This is concerning, especially in areas like healthcare and education where we are already seeing major problems caused by a lack of people to perform vital roles.”
Julia Kermode, CEO of The Freelancer & Contractor Services Association (FCSA), added, "Just 7,000 (7%) of the 106,000 increase in the workforce was due to self-employment. Interestingly, behind that 7,000 figure is an increase of 23,000 fulltime self-employed, combined with a loss of 16,000 part-time roles which indicates that more people are choosing fulltime self-employment. This is positive for the economy as there are more flexible workers able to support businesses as and when needed. This is borne out by the year on year figures that show 49% of the 560,000 increase in the UK workforce is due to self-employment. The UK continues to have a very low unemployment rate at 4.9%, and only three countries in the EU have a lower rate: Czech Republic 3.9%, Germany 4.2% and Malta 4.8%. The economic importance of the flexible workforce will continue to be key during any uncertainty around leaving the EU."
Doug Monro, co-founder of Adzuna, said, “Although Brexit plans won’t be fully disclosed until Spring 2017, employment figures haven’t been negatively impacted as the percentage of people in work holds steady. However, the unemployment rate has also increased, suggesting that a tough road may potentially lie ahead once Brexit plans are set in stone.
“In the last week alone, Fujitsu, Travis Perkins and DB Cargo have all announced significant reductions to their UK workforces. The banking sector is also feeling the pinch, with Lloyds confirming 1,230 job cuts and Adzuna data showing 11% fewer finance roles being advertised in August than a year ago.
“In the meantime, following Theresa May’s comments accepting that the Brexit debate should remain full and transparent before triggering Article 50, employers and employees should remain confident and hopeful for a positive outcome as there are still jobs being created. It’s also important to look at the wider context that there has been an 118,000 drop in unemployment since this time last year, so it’s not all negative news.”
Kay Cooper, vice president key accounts, EMEA, Futurestep, stated, "According to the ONS, unemployment in the UK has remained the same for the fourth consecutive month. While the fact that this hasn’t increased is positive, UK businesses should still be working towards reducing the unemployment rate. A good place to start is utilising the power and capabilities available to them such as mobile devices and social media to widen the net when finding new talent.
“However, to effectively further the UK’s jobs-led recovery, organisations need to understand what employees want and then engage with their needs. While the ONS figures highlighted a 2% increase in average weekly earnings compared to 2015, our research has shown job stability and making an impact on the business matter most to both baby- boomer and millennial employees. This highlights that financial compensation is not the main incentive for finding, on-boarding and retaining talent. Having the right recruitment tools and technology in place will also make this process fast and efficient for the pipeline of potential employees that organisations want to tap into.”
Nick Gold, Jobsite CEO, added, “It’s not a surprise to see that following a turbulent few months for the economy that the employment rate is falling slightly. At Jobsite, whilst we’re still seeing vacancy numbers continuing to grow at a stable rate (+4.6% year on year) we have also seen a rapid growth in applications for each job. Businesses should see this as an opportunity to engage this new and larger pool of skilled workers who are looking to make a career move now the dust is settling.”
Picture courtesy of Pixabay