Labour market statistics: Unemployment is falling, yet so are real wages

The fall in unemployment was smaller than the rise in the number of economically inactive people who want work.

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Today’s employment figures were good; employment was up and unemployment down:

Nov – Jan Feb – Apr Change
Employment 29,115,000 29,281,000 + 166,000
Unemployment 2,666,000 2,615,000 – 51,000

The employment rate was up (0.3 points) and the unemployment rate was down (0.2 points). Total hours worked increased as well, continuing a trend that has been noticeable for a year:

Total weekly hours worked

In previous months, we have reported that good overall figures have disguised an increase in underemployment and a decline in the number of full-time jobs and there was an increase in underemployment:

Nov – Jan Feb – Apr Change
Involuntary temporary work 612,000 607,000 – 5,000
Involuntary part-time work 1,383,000 1,408,000 + 25,000
Total underemployment 1,995,000 2,015,000 + 20,000

 


See also:

Labour market statistics: Unemployment is falling, yet so are real wages 20 Jun 2012

Encouraging news on jobs, but far too early to call a labour market recovery 7 Mar 2012

Growth in jobs probably not enough to bring down unemployment 8 Feb 2012


 

But that is less of an issue this month – full-time jobs accounted for half the increase in employment and the total number of people in temporary jobs fell by 2,000; employees working full-time only accounted for 27,000 of the increase in employment, but it is an increase rather than a fall.

The redundancy level came down (by 18,000) and so did the redundancy rate – the number of redundancies per thousand employees, which came down 0.7 to 6.2. There was a slight (1,000) increase in the number of vacancies, but the number of unemployed people per vacancy remained at 5.7.

There are negative results, with a disturbing increase in long-term unemployment:

All over 6 months All over 12 months All over 24 months
+ 9,000 + 30,000 + 29,000
Highest figure since Jun-Aug 1995 Jul-Sep 1996 May-Jul 1997

There was an 8,100 increase in the Claimant Count measure of unemployment, though the key point to bear in mind here is that the numbers claiming JSA have essentially flatlined for about nine months:

Claimant Count 1
The fall in unemployment was smaller than the rise in the number of economically inactive people who want work (59,000) – this figure has risen in five of the last six months. Youth unemployment came down 28,000, but there was a 19,000 increase in the number of under-25s not in full-time education and not in employment.

Average weekly earnings (regular pay) in April were 1.8 per centage points higher than 12 months previously; this is up from 1.6 per cent in March, but still well below the 3.1 per cent increase in the Retail Price Index, so real wages are still falling.

 


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