Today’s release from the Office for National Statistics (ONS) shows that as the UK economic upturn matures as the UK labour market remains resilient.
The key points comparing the three months to July 2015 with the three months to April were:
- Employment rose by 42,000. The number of employees was up 8,000, accompanied by a rise of 40,000 in self-employment
- The number of full-time employees was up 9,000
- The unemployment rate remained at 5.5%
- Average weekly earnings both including and excluding bonuses rose by 2.9% compared with a year earlier.
Several key indicators such as the rise in full-time employee numbers and the increase in average earnings show that the labour market remains robust. But as the economic recovery consolidates, increases in these indicators are much more moderate than in the early phase of the upturn. All in all, today’s figures present a mixed picture. The unemployment data raises concerns that the strong hiring pattern of recent years is running out of steam. But the strength of earnings growth coupled with inflation at zero boosts prospects for a continuation of buoyancy in household spending. This will sustain GDP growth at a solid pace (2.6% this year and 2.3% in 2016), underpinning further employment creation, albeit at a much slower pace than in the past two years, as well as providing scope for a further modest reduction the unemployment rate.