For regular readers of the UK Office for National Statistics (ONS) monthly release of official labour market statistics, the latest 'Jobs Report' published earlier this morning will have a distinctly familiar feel.
Another record number and proportion of people in work (up 125,000 in the latest quarter to 32.07 million or 75.1%), the unemployment rate down to a 42 year low of 4.4%, combined with anemic average regular weekly nominal wage growth at 2.1% and falling real wages, down 0.5%. The unemployment rate continues to scream tight labour market and near full employment, but pay points to continued slack and poor productivity growth (output per hour worked having fallen by a further 0.1% according to the ONS’ latest flash estimate). The UK jobs market is thus performing very well but still far from ‘strong’ in a meaningful sense of the word.
In terms of detail, the continued rise in the employment rate of EU nationals working in the UK to 80.8% over the past year is a good news-bad news story. On the one hand, although the inflow of EU migrants has slowed considerably compared with recent years, it indicates that the Brexit vote has not overall deterred migrants from entering the UK to fill job vacancies. But on the other hand it further highlights the dependence of many UK employers on the free movement of EU labour and thus the possible negative consequences of a hard Brexit deal.
Finally, while the annual fall of 20,000 to 883,000 in the number of people on a zero-hours contract in their main jobs leaves the proportion of zero-hours contract workers in total employment unchanged at 2.8%, it now looks as though the proportion peaked last year at 2.9%. It is unclear, however, if this reflects a change in the underlying economic conditions faced by employers or a response to popular pressure on firms to offer staff greater security over hours and incomes.