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UK employment at highest since 1971 – BBC News

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The number of employed people in the UK has risen again, to a new record number of 32.7 million people between November and January, figures from the Office for National Statistics (ONS) show.

The 76.1% employment rate is the highest since records began in 1971.

Unemployment fell by 35,000 to 1.34 million in the period, putting the rate below 4% for the first time since 1975.

The figure is 112,000 lower than a year ago, giving a jobless rate of 3.9%, well below the EU average of 6.5%.

Average weekly earnings, excluding bonuses, were estimated to have increased by 3.4%, before adjusting for inflation, down by 0.1% on the previous month but still outpacing inflation.

ONS senior statistician Matt Hughes said: “The employment rate has reached a new record high, while the proportion of people who are neither working nor looking for a job – the so-called ‘economic inactivity rate’- is at a new record low.”

The number of men in employment increased by 77,000 to reach a record high of 17.32 million in the three-month period.

The number of women in employment increased by 144,000 to reach a record high of 15.40 million over the same period. This was the largest increase in the number of employed women since the period February-to-April 2014.

Meanwhile, the number of economically inactive people fell by 117,000 to 8.55 million, a rate of 20.7%, the lowest on record.

And the number of job vacancies in the economy increased by 4,000 to 854,000.

Employment Minister Alok Sharma said: “Today’s employment figures are further evidence of the strong economy the chancellor detailed in last week’s Spring Statement, showing how our pro-business policies are delivering record employment.

“Our jobs market remains resilient as we see more people than ever before benefiting from earning a wage. By backing the government’s Brexit deal and giving certainty to business, MPs have the chance to safeguard this jobs track record.”

Andrew Wishart, UK economist with Capital Economics, said: “There was no sign in the labour market data of Brexit concerns at the start of the year, as the data beat expectations in every regard.

“This will add to concerns that the Brexit-related fall in investment is having a detrimental effect on the economy, as firms have opted to hire workers to meet demand rather than invest. It is also a mix that could push up inflation.

“As a result, if there is a long delay to Brexit or a deal is struck, we suspect the [Bank of England’s] Monetary Policy Committee will raise interest rates this summer.”

Analysis:

By Andy Verity, BBC economics correspondent

If you were being uncharitable to politicians, you might say today’s jobs figures demonstrate how little they matter. “Crisis, what crisis?” said recruiters as they hired 220,000 people in the three months to the end of January.

How can you reconcile all that job creation with talk of a Brexit-induced slowdown?

One answer is that the jobs market lags behind the rest of the economy. Recruiting people takes time; it can be months between noticing you need some new staff and their starting work, so the recruitment decisions reflect recruiters’ sentiments months ago.

Another reason may be that our jobs market is highly flexible, which is to say the risks fall on employees. In uncertain times, a company whose order book is expanding may prefer to take on people who can be “let go” later if things go wrong.

That can be less costly than investing large sums in new plant and machinery, for example – investment which might prove wasted if demand for your goods shudders to a halt in a few months’ time.

If that story is right, it helps explain why the economy is generating jobs, but not much investment. And although there are more of us working, notably women and older people joining the workforce, the amount we each produce is barely growing. That puts a question mark over the sustainability of real wage growth of 1.4% – the strongest in more than two years.

Tej Parikh, senior economist at the Institute of Directors, said: “Businesses have been steadfast in bringing on board new staff and in creating vacancies, despite question marks over the future path of the economy.

“But with uncertainty around Brexit reaching a crescendo, firms are becoming more and more cagey over their hiring decisions.

“To build on the current strength in UK employment, employers will want to avoid a disorderly withdrawal from the EU and will above all be urging policymakers to return some much-needed oxygen to the skills and productivity agenda.”

Stephen Clarke, senior economic analyst at the Resolution Foundation think tank, said: “While business investment has stagnated, firms are choosing instead to invest heavily in new staff. As a result, the proportion of people in work is at its highest rate since the war, and Britain is closing in on Nordic employment rates.

“This encouraging jobs growth is benefiting women and those traditionally left out of the labour market. It is even starting to have a knock-on effect on still historically weak pay rises. This is crucial for driving a long-overdue pay recovery for workers, but may be held back if firms’ reluctance to invest continues.”

However, Commerzbank economist Peter Dixon warned: “There is continued strength in the labour market, but we all know that it is a lagging indicator and we shouldn’t get too carried away,

“There have to be questions about how long the labour market can continue at this pace.”

UK employment at highest since 1971 – BBC News

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