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Employment rate rises back to 75.3%

Estimates from the Labour Force Survey show that, between August to October 2017 and November 2017 to January 2018, the number of people in work and the number of unemployed people both increased, but the number of people aged from 16 to 64 not working and not seeking or available to work (economically inactive) decreased.

There were 32.25 million people in work, 168,000 more than for August to October 2017 and 402,000 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%, higher than for a year earlier (74.6%) and the joint highest since comparable records began in 1971.

There were 1.45 million unemployed people (people not in work but seeking and available to work), 24,000 more than for August to October 2017 but 127,000 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 4.7% for a year earlier and the joint lowest since 1975.

There were 8.72 million people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 158,000 fewer than for a year earlier and the lowest since November 2000 to January 2001.

The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.2%, lower than for a year earlier (21.6%) and the joint 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 2.6% excluding bonuses, and by 2.8% including 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 0.2% excluding bonuses, but were unchanged including bonuses, compared with a year earlier.

Recruitment & Employment Confederation (REC) director of policy, Tom Hadley, commented, “The number of people in employment continues to rise, showing business is performing well. However, the number of vacancies holds close to a record high, showing employers need even more workers to fill roles. There are plenty of jobs out there for candidates with high in-demand skills, which could be anyone from drivers to nurses to baristas. Employers have to compete with each other to attract those people and our data shows that one way they are making themselves more attractive is by offering higher starting pay.

“Although inflation remains above pay growth, the positive news is the gap looks to be closing. Employers should think about what else they can offer staff in terms of training and benefits too. In many sectors, employers are facing a staffing crisis. It’s a smart move to incentivise your current staff to stay with you at a time when they could be getting competitive pay offers elsewhere.”

Tara Sinclair, economist and senior fellow at Indeed, said, “Despite some high-profile outbreaks of Tiggerish enthusiasm about the economy’s progress, Britain’s wage problem is proving as prickly as Eeyore’s thistle patch.

“The average Briton’s paypacket still isn’t keeping up with the rising cost of living, and in January average regular wages slipped by 0.2% in real terms.  

“But with yesterday’s confirmation that consumer price rises are slowly easing, both the Office for Budget Responsibility and the Bank of England are now predicting that real wages will find themselves back in positive territory over the coming months as inflation falls further.

“The prospect of Britons finally having more purchasing power is an encouraging one for an economy as reliant on consumer spending as Britain’s.

“With the economy inching closer to full employment, we’re seeing some interesting anomalies - the number of employed and unemployed people both rose. The reason for this seeming contradiction is the return to the labour market of people who had previously been economically inactive.

“However with the UK’s jobs creation boom slowing, the labour market’s ability to deliver a boost to the economy is increasingly resting on productivity.

“More productive workers create a bigger pie for all of us; and while the current numbers showed a surprise, if modest, uptick in productivity, that needs to sustain into 2018 if the UK is to hit the OBR’s forecast of 1.5% GDP growth this year.”

David Clift, HR director at totaljobs, stated, “Today’s ONS figures mark the second consecutive month that unemployment has risen, which is naturally very disappointing after a period of record highs. However, with several high-profile companies going into administration this month, including Toys R Us and Maplin, these numbers were to be expected.

“Further adding to the job seeker’s woes is Brexit. It has now been one year since Theresa May trigged Article 50, so it comes as no surprise that the jobs market is beginning to look more uncertain, especially with a continued lack of clarity on next steps.

“In these challenging times, employers can look to focus on their training and development programmes, to ensure they’re filling their roles with skilled employees and doing their best to retain top talent. Job seekers on their end can focus their search on industries that have seen a growth in job ads, including education (+26%) and engineering (+7%).”

Lee Biggins, founder and managing director of CV-Library, commented, “The employment rate is at its highest and while this is good news for the economy, many employers are struggling to find the talent they need to plug the skills gap. Our own data found that advertised jobs were up by 11.2% in January 2018 compared to the previous year, yet candidate appetite is failing to keep up with employer demand.


“Professionals are nervous about their position in the current market – and who can blame them. The government has not been clear enough about Brexit plans, meaning many workers seek financial stability in their current employment. In turn, recruiters are having to become more creative with their hiring efforts, in order to attract the best talent.”

Ian Brinkley, acting chief economist at the CIPD, said, “These figures show that the labour market seems to have plenty of life left in it, with unemployment remaining at a historically low rate and a substantial rise in employment driven by more people in full time and permanent work. However, it is concerning that the unemployment rate for women has increased significantly and now has overtaken unemployment rate for men. The Government must ensure they’re doing all they can to help more women get into the labour market, including promoting more flexible working styles.

“The pay picture is looking brighter, as pay continues to climb steadily. Against a backdrop of falling inflation, it is likely that real wage growth will turn positive next month, providing a long-awaited boost to workers across the country after a seemingly endless period of wage stagnation.”

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