Figures from the National Office for Statistics concerning the UK job market during May, June and July revealed some unexpected good news for jobseekers. During that period, around 80,000 new jobs were created compared to the previous quarter, while the total rise in the number of new jobs created year-on-year was a pretty healthy 287,000, but is the worst now over?
Prior to this year, things looked bleak for the economy as a whole, with unemployment well over the 2.5m mark. Reluctance on the part of many employers to take on new staff and retain existing employees seemed like it was never going to end, but things seem to be improving. However, of the close to 30m currently in work, 8.05m are in part-time jobs, which obviously pay less.
Caution advised
Unemployment dropped by 24,000 during the quarter, while the claimant count for those on Jobseeker’s Allowance fell by 33,000 in the same period. Both are encouraging, but the news hasn’t quite been good enough for people to start feeling overly optimistic, as Joshua Raymond from City Index explained. He said:
“The UK labour market data released today by the Office of National Statistics is excellent news for the UK economy. Not only did the unemployment rate fall unexpectedly to 7.7% but we also saw jobless benefit claims fall much more than expected by 32,600.
“However, whilst this cements further evidence of a brightening UK economic recovery, we should be mindful of the fact that the UK unemployment rate has been at 7.7% three times before in the last three years before rising back to 7.9%”, added Mr Raymond.
Wage growth concerns
Something else which needs to improve to help provide the labour market with a further boost is wage growth. As it stands, the annual growth rate on average is hovering around 1%, which is far lower than the rate of inflation. A narrowing of the gap between the two is necessary to keep any momentum going,
About this, Mr Raymond commented: “Wage growth remains significantly below the rate of inflation which remains a threat to the power of the consumer and UK retailers. So whilst the recent jobless data is good news, we should not be getting the party balloons out just yet."
