Office for National Statistics data for the labour market in the three months to November 2012 remained firmly positive. Employment in September to November rose by 90,000 compared with June–August. While the latest figures reveal a welcome rise in employment amid a difficult economic environment, they suggest that the extremely strong and surprising pace of the past year is easing, coming after an increase of 212,000 between March-May and June-August.
The latest figures took the rise in employment over a year earlier to 552,000, a highly encouraging performance given ongoing job losses in the public sector and the weakness of the economy. The increase in the latest quarter was particularly surprising given the unwinding of the Olympics effect that had boosted employment during the summer and the fact that the data cover a period that includes two months of the final quarter of 2012, which is widely expected to have seen little growth or more likely a contraction in GDP.
Unemployment fell by a further 37,000 on June to August and was down 185,000 on a year earlier, with the unemployment rate falling to 7.7%.
Of the total 90,000 of jobs created in the three months to November, full-time jobs were up 113,000, with the number of part-time jobs falling. This is an encouraging development and brings the number of people working part-time because they could not find full-time work down by 23,000 from June-August, although the number is still 73,000 up on the level seen a year earlier.
Annual total earnings growth remained subdued at 1.3% year-on-year in November. With inflation set to remain above pay growth for at least another year, real incomes will remain under pressure through 2013.
We expect employment trends to continue to ease in the near term in line with downbeat recent business surveys and the bleak backdrop for output. The unemployment rate is likely to move above 8% as we approach mid-2013, before conditions improve again in the second half of the year.
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