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Employment rate rises to 76.2%

The ONS has released its latest employment figures for the period between August and October 2019.


Estimates for August to October 2019 show 32.80m people aged 16 years and over in employment, 309,000 more than a year earlier. This annual increase was mainly driven by women (up 235,000 on the year) and full-time workers (up 272,000 on the year).


The UK employment rate was estimated at 76.2%, 0.4 percentage points higher than a year earlier but little changed on the previous quarter; despite just reaching a new record high, the employment rate has been broadly flat over the last few quarters.


There was a 24,000 increase in employment on the quarter. This was driven by a quarterly increase for men (up 54,000) and full-time employees (up 50,000 to a record high of 20.71m), but partly offset by a 30,000 decrease for women and a 61,000 decrease for part-time employees.


For August to October 2019 the estimated UK unemployment rate for all people was 3.8%, 0.3 percentage points lower than a year earlier but largely unchanged on the previous quarter.


For people aged between 16 and 64 years, for August to October 2019 the estimated economic inactivity rate for all people was 20.8%, down 0.2 percentage points on the year but largely unchanged on the quarter.


Estimates for August to October 2019 show 8.61m people aged between 16 and 64 years not in the labour force (economically inactive). This was 60,000 fewer than a year earlier and 447,000 fewer than five years earlier.


The rate of pay growth has trended upwards since March to May 2017, reaching 3.9% in May to July 2019, the highest nominal pay growth rate since 2008. In August to October 2019, growth dropped to 3.2% for total pay and 3.5% for regular pay.


The growth in total pay is impacted downwards by unusually high bonuses having been paid in October 2018, whereas those in October 2019 are at more typical levels.


In real terms, annual pay growth has been positive since December 2017 to February 2018 and is now 1.5% for total pay and 1.8% for regular pay.


For October 2019, average regular pay, before tax and other deductions, for employees in Great Britain was estimated at £510 per week in nominal terms. The figure in real terms (constant 2015 prices) is £472 per week, which is still £1 (0.2%) lower than the pre-recession peak of £473 per week for April 2008.


The equivalent figures for total pay in real terms are £502 per week in October 2019 and £525 in February 2008, a 4.3% difference.


Neil Carberry CEO at the Recruitment & Employment Confederation, commented, “Today’s figures show why the government needs to be focused on making great work happen. Uncertainty before the election took its toll, with the gentle slowdown we have seen in the jobs market over the past few months continuing, led by a 10th successive month of falling vacancies. Taking a longer-term view, we should remember that overall performance is strong. And a lot has changed since this data was collected. It remains to be seen if the clarity the election result has delivered will translate into businesses launching the ambitious hiring plans they have been cautiously putting on hold, as our data has shown for many months.


“The government shouldn’t wait for confirmation of this to get on with the task of supporting businesses to grow. Keeping the campaign trail promise to review IR35 changes swiftly would be a great start – the reform should not go ahead until it can be effectively delivered and that will not be in 2020. A sensible plan that avoids a no-deal Brexit must be delivered in 2020 with long-term trading arrangements in place for the UK’s world leading services sector, as well as manufacturing.


“The biggest challenge to growth is continuing skills shortages. Productivity hinges on government’s ability to address this. One huge opportunity is to open up the apprenticeship levy to the millions of people who choose flexible work.  For the sick to be treated, for homes to be built, and for food to be produced, the UK also needs an immigration system that meets employers’ needs for skills at all pay-levels.”


Pawel Adrjan, UK economist at Indeed, commented, “In a week which saw all change at Westminster, Britain’s labour market has returned stubbornly to type - and presented the new Government with an unsolved puzzle.


“With the employment rate still pushing the envelope of what is possible - clocking yet another record - and unemployment very low, wages should be rising faster than this.


“But the spurt of rapid wage growth seen earlier this year has faded. While average paypackets are still growing faster than the cost of living - boosting people’s spending power in real terms - such a tight labour market would ordinarily force employers to ramp up wages in order to lure recruits.


“But behind the apparently robust headline numbers, warning lights are beginning to glow. The total number of vacancies is shrinking as Britain’s job creation boom slowly runs out of steam.


“The UK narrowly escaped a recession in 2019, and business confidence remains fragile, meaning many employers have put off hiring decisions. As the UK steps into its non-EU future, few expect a sudden jump in employers’ willingness to hire.”


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