Experian welcomes the positive labour market figures released today, though the weakness in wage growth remains a concern.
The key points comparing the three months to December 2015 with the three months to September 2015 are:
• Employment rose by 205,000. The number of employees was up 99,000, accompanied by a rise of 105,000 in self-employment
• The number of full-time employees was up 188,000
• The unemployment rate fell to 5.1% from 5.3%
• Comparing the three months to December 2015 with a year earlier, pay for employees in Great Britain increased by 1.9% including bonuses and by 2.0% excluding bonuses.
The labour market upswing remains very strong. There was robust employment growth in the second half of 2015 following a slowdown in the first part of the year and there has been a sizeable fall in unemployment. Growth in full time workers was similarly robust and job vacancies in the three months to January 2016 grew by 23,000 to 776,000, their highest level since comparable records began in 2001.
Despite the general labour market strength, total earnings were up only 2% in the year to October – December. This is the weakest outcome since February 2015 and the question mark surrounding the UK’s productivity performance remains.
Nevertheless wage growth remains well above the extremely benign rate of inflation, and strong real disposable incomes are expected to provide a solid foundation for consumer spending growth of 2.6% in 2016, supporting overall expansion at 2.2%.