Number of people in employment in UK soars to record high
A sharper-than-expected fall in unemployment in the UK indicated the job market remained in good shape in January, when the numbers in work reached a record high on both sides of the border.
However, average earnings rose by less than expected in the last months of 2006, indicating that immigrants and older women who returned to work kept the lid on pay growth before the annual pay round began in earnest last month.
According to the Office for National Statistics, the numbers claiming Jobseekers Allowance fell by 13,500 last month, to 925,800.
he fall was the fourth in successive months and the biggest in any since May 2004. It far exceeded City expectations that the claimant count would be reduced by 5000.
Unemployment also fell on the government's preferred International Labour Organisation measure in the three months to December, for the first time in more than two years.
The data indicate that despite concerns about the impact of increased interest rates and a possible slowdown in export markets, employers were confident enough to keep hiring at the turn of the year.
In Scotland, where the strength of the labour market helped spur a period of above-trend growth last year, claimant count unemployment fell for the seventh month running in January.
The numbers in employment in Scotland increased by 33,000 in the three months to December, to 2,507,000 people, the highest since records began in 1992. Across the UK, employment rose by 51,000, to a record high of 29.04 million.
Economists agreed that the data provided signs of a tightening in the labour market, which might trouble interest rate hawks at the Bank of England.
However, economists also noted that the rate of growth in average earnings fell from 4.1% in the three months to September to 4% in December, based on the three-month average of the annual rate.
Excluding bonuses, earnings growth slowed to 3.7% in the latest period, from 3.8%.
City experts had forecast increases of 4.2% on the headline measure and 3.8% excluding bonuses.
Signs of a weakening in wage pressures may reflect the fact that the numbers seeking work have been swollen by immigrants from eastern Europe. Additionally, Lucy O'Carroll, director of research at HBOS treasury services, noted many women of pension age had been re-entering the job market, possibly in order to supplement their pensions.
These are developments that may be welcomed by interest rate doves at the Bank of England.
However, while the Engineering Employers' Federation said manufacturing pay rises averaged less than 3% in January, experts said people should not read too much into official data on pay covering the October-to-December period.
"The Bank of England is far more concerned with pay trends during the current January-April pay round, when two-thirds of all settlements are agreed," said O'Carroll.
While the labour market expanded, the number of jobs in the beleaguered manufacturing sector fell by 63,000 in the three months to December compared with a year earlier, to just over three million, the lowest on record.
The employment rate was 76.1% in Scotland, 1.5 percentage points higher than in England. The claimant count rate in Scotland fell by 0.1 percentage points in January, compared with December. At 3.1% it remains close to the historical low.
Unemployment in Scotland on the ILO measure was 139,000 in October to December, up 7000 on the previous quarter and 3000 on the same period a year ago. The ILO unemployment rate was up 0.2 percentage points on the quarter, to 5.2%, unchanged in the year.
In the UK, 1.69 million people were unemployed on the ILO measure in October to December, down 23,000 on the quarter but up 133,000 on the year.
The ILO unemployment rate in the UK was 5.5%, down 0.1 percentage points on the quarter but up 0.4 points over the year.
The claimant count was 2.9% in January, the lowest since February 2006.
The number of people classed as economically inactive, including those looking after a relative or not seeking work, increased by 19,000 to 7.85 million, 21% of the working-age population.
However, average earnings rose by less than expected in the last months of 2006, indicating that immigrants and older women who returned to work kept the lid on pay growth before the annual pay round began in earnest last month.
According to the Office for National Statistics, the numbers claiming Jobseekers Allowance fell by 13,500 last month, to 925,800.
he fall was the fourth in successive months and the biggest in any since May 2004. It far exceeded City expectations that the claimant count would be reduced by 5000.
Unemployment also fell on the government's preferred International Labour Organisation measure in the three months to December, for the first time in more than two years.
The data indicate that despite concerns about the impact of increased interest rates and a possible slowdown in export markets, employers were confident enough to keep hiring at the turn of the year.
In Scotland, where the strength of the labour market helped spur a period of above-trend growth last year, claimant count unemployment fell for the seventh month running in January.
The numbers in employment in Scotland increased by 33,000 in the three months to December, to 2,507,000 people, the highest since records began in 1992. Across the UK, employment rose by 51,000, to a record high of 29.04 million.
Economists agreed that the data provided signs of a tightening in the labour market, which might trouble interest rate hawks at the Bank of England.
However, economists also noted that the rate of growth in average earnings fell from 4.1% in the three months to September to 4% in December, based on the three-month average of the annual rate.
Excluding bonuses, earnings growth slowed to 3.7% in the latest period, from 3.8%.
City experts had forecast increases of 4.2% on the headline measure and 3.8% excluding bonuses.
Signs of a weakening in wage pressures may reflect the fact that the numbers seeking work have been swollen by immigrants from eastern Europe. Additionally, Lucy O'Carroll, director of research at HBOS treasury services, noted many women of pension age had been re-entering the job market, possibly in order to supplement their pensions.
These are developments that may be welcomed by interest rate doves at the Bank of England.
However, while the Engineering Employers' Federation said manufacturing pay rises averaged less than 3% in January, experts said people should not read too much into official data on pay covering the October-to-December period.
"The Bank of England is far more concerned with pay trends during the current January-April pay round, when two-thirds of all settlements are agreed," said O'Carroll.
While the labour market expanded, the number of jobs in the beleaguered manufacturing sector fell by 63,000 in the three months to December compared with a year earlier, to just over three million, the lowest on record.
The employment rate was 76.1% in Scotland, 1.5 percentage points higher than in England. The claimant count rate in Scotland fell by 0.1 percentage points in January, compared with December. At 3.1% it remains close to the historical low.
Unemployment in Scotland on the ILO measure was 139,000 in October to December, up 7000 on the previous quarter and 3000 on the same period a year ago. The ILO unemployment rate was up 0.2 percentage points on the quarter, to 5.2%, unchanged in the year.
In the UK, 1.69 million people were unemployed on the ILO measure in October to December, down 23,000 on the quarter but up 133,000 on the year.
The ILO unemployment rate in the UK was 5.5%, down 0.1 percentage points on the quarter but up 0.4 points over the year.
The claimant count was 2.9% in January, the lowest since February 2006.
The number of people classed as economically inactive, including those looking after a relative or not seeking work, increased by 19,000 to 7.85 million, 21% of the working-age population.
Labels: employment, Jeff Altman, The Big Game Hunter, The Job Market Blog, United Kingdom
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