The Office for National Statistics (ONS) has this morning released the latest set of UK labour market data, mostly covering the three months January to March 2015.
This month’s labour market figures bring good news for jobseekers and wage earners alike. Another large quarterly increase of 202,000 in the number of people in work in the UK has lifted the employment rate to a new record high of 73.5%. More than two-thirds of the additional jobs are full-time, mostly for employees. The unemployment rate meanwhile has fallen to 5.5%, including a substantial fall of 50,000 (to 588,000) in the number of long-term jobless. Despite this, the overall quarterly fall in unemployment (35,000) is modest compared to the rise in employment due to a corresponding rise of 167,000 in the number of people participating in the labour market. Part of this latter rise is in turn due to a fall of 69,000 in the number of economically inactive people of working age.
With the unemployment rate edging closer to the pre-recession low (5.2%) and both employment and vacancies (up 34,000 to 745,000 in the quarter) at record highs, there is also clear evidence that wage growth is at last gaining momentum. The rate of growth of average regular weekly pay (excluding bonuses) has increased from 1.9% to 2.2% against a backdrop of zero price inflation. The increase is far higher in the private sector (2.7%) than the public sector (0.9%). Most encouraging of all, however, pay is rising fastest in low wage sectors, averaging 3.1% across wholesaling, retailing, hotels and restaurants, offering a welcome boost to real wages for the lowest paid workers.