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Employment rate up to 75.3%, ONS reveals

Estimates from the Labour Force Survey show that, between February to April 2017 and May to July 2017, the number of people in work increased, the number of unemployed people fell, and the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) also fell.

There were 32.14m people in work, 181,000 more than for February to April 2017 and 379,000 more than for a year earlier.

The employment rate (the proportion of people aged from 16 to 64 who were in work) was 75.3%, the highest since comparable records began in 1971.

There were 1.46m unemployed people (people not in work but seeking and available to work), 75,000 fewer than for February to April 2017 and 175,000 fewer than for a year earlier.

The unemployment rate (the proportion of those in work plus those unemployed, that were unemployed) was 4.3%, down from 4.9% for a year earlier and the lowest since 1975.

There were 8.74m people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 107,000 fewer than for February to April 2017 and 96,000 fewer than for a year earlier.

The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.2%, down from 21.6% for a year earlier and the lowest since comparable records began in 1971.

Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.1%, both including and excluding bonuses, compared with a year earlier.

Latest estimates show that average weekly earnings for employees in Great Britain in real terms (that is, adjusted for price inflation) fell by 0.4%, both including and excluding bonuses, compared with a year earlier.

Mariano Mamertino, EMEA economist at Indeed, commented, “Economic textbooks suggest the UK's falling unemployment rate will eventually ride to the rescue of the millions of Britons suffering from falling real wages.

“The theory goes that with unemployment now well below what the Bank of England deems the ‘natural’ rate - coupled with the lowest inactivity rate in decades - employers will have to start paying higher wages to attract the staff they need to grow.

“But so far the theory has failed to keep up with reality. With consumer prices now rising at an eyewatering 2.9% a year, most people’s pay packets aren’t even close to keeping up.

“Even with the lifting this week of the public sector pay cap in England and Wales, pay rises for civil servants are likely to stay well below inflation, and it’s a similar story across much of the private sector.

“Of course it’s good news that the economy continues to create jobs, but this latest fall in the number of unemployed people risks being a vanilla irrelevance in a labour market which is stubbornly refusing to play ball with economic theory and causing increasing pain to workers.”

Lee Biggins, founder and managing director of CV-Library, said, “The UK labour market is continuing to stand strong in the face of uncertainty and businesses are clearly feeling confident about their hiring plans. It’s extremely promising to see that the national employment rate is climbing and our own data found that candidate appetite picked up in July, with applications soaring in key cities across the UK.  What’s more, job vacancies increased by an impressive 8.3% year-on-year and even higher in cities such as Brighton, Manchester, Leeds and Edinburgh.

“According to the ONS, the real value of people’s earning is down, and this could stall application rates in the coming months. It’s safe to say that money continues to be a key driver for candidates, with many refusing the settle for job offers which don’t tick all the boxes for their financial goals. This means that UK businesses must plan ahead and implement a recruitment strategy that is cost-effective, while also offering the best possible packages to eager job hunters. In the long run, this will help to attract the top talent.”

Doug Monro, co-founder of Adzuna, stated, “The ongoing Brexit battle and stringent salaries hitting a three-year low have, so far, had little impact on the volume of vacancies in the labour market. UK advertised roles continue to surge, with more than 1.2 million openings currently listed on Adzuna.

“Despite slow wage growth, it is encouraging to see unshaken confidence in terms of hiring intentions and increasing business output. Jobseekers and employees can hopefully start to breathe a sigh of relief, as capital investment will potentially create opportunities for higher-paid employment at both ends of the skill spectrum.       

“Recent research by The World Economic Forum shows that the world’s youth still want to work in the UK and with 50% of the world’s population being under 30, companies need to adopt a millennial mindset in how they approach recruitment, retention and marketing if they want to attract the best candidates.”

totaljobs’ HR director, David Clift, added, “Today’s announcement that unemployment has fallen yet again is evidence of the continued strength of the job market this year. It’s a positive sign to see continued growth from May to July, particularly amid what was clearly a turbulent political period.

“To illustrate the strong performance of the UK job market and to put these figures into context, the last time the UK’s unemployment rate was this low was 1975, the year when the British public voted overwhelmingly to remain in what was then called the European Economic Community. Times have certainly changed since.

“Moving forward we can continue to be cautiously optimistic as the job market remains stable, despite ongoing political uncertainties both at home and abroad. That doesn’t mean government or the private sector should rest on its laurels, however, and robust employment strategies must be used to spur further improvements.”

Jason Downes, MD of, said, "This release is better news for householders as the UK average earnings have come in higher than expected. As average weekly earnings has risen by 2.1% year on year in the three months to July. The number of people in work increased and the number of people unemployed fell. The job market is continuing to go from strength to strength. The unemployment rate fell to 4.3% in the three months to July, down from 4.4% in the previous quarter and 4.9% a year earlier. This is really positive for businesses and their confidence in hiring is growing. I hope to see this trend continue well into 2017 as we prepare for Brexit to take effect. I think we all need to continue to employ smarter working policies including flexible and remote working in order to remain competitive and give our employees a better work-life balance. It’s also great to see that the number of people on zero hour contracts has fallen by 20,000. "

Richard Shea, managing director EMEA Search at Futurestep, a Korn Ferry company, responded to the news, “Despite businesses continuing to walk the tightrope of economic uncertainty, it’s positive to see employment had surged to a record 75.3 per cent as a result of the 400,000 jobs created in the past year alone.

“The age of digital disruption is seeing business models, industries and working practices transform, with jobs that didn’t exist a few years ago being created. What this means is there are increasing demands for new skill sets in virtually every job and profession. As a result, hiring and retaining workers who are agile and who can adapt to the fast pace of change is and will be critical for staying ahead of the competition curve.

“In order to keep abreast of this wave, organisations must ensure they are going beyond just simply hiring more employees by streamlining their recruitment and talent management strategies to support their long-term business development goals. Best in class talent acquisition teams will those prepared with refreshed job profiles that look, not only at the skills and experiences but, at the competencies, traits and drivers that will find talent that is a fit for the current job but also for the business.

"Whilst we’ve already seen a move in this direction, more can still be done to plan strategically to ensure productivity is maximised amongst their workforce. After all, this will be the rule – not the exception – to driving the UK’s economy forward.” 

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