Extract from Redwood Financial’s Economic Review August 2019
The latest batch of employment data released by the Office for National Statistics (ONS) shows that the UK labour market remains in robust health, with the total number of people in work rising to another record high.
Statistics from the Labour Force Survey showed that a net 115,000 jobs were created during the second quarter of 2019, taking the overall level of employment to a new high of 32.81 million. As a result, the employment rate (the proportion of 16–64-year-olds in work) rose to 76.1%, the joint-highest figure since comparable records began in 1971. This increase was largely driven by further growth in the proportion of working women.
The data also revealed another increase in the level of pay, with average weekly earnings excluding bonuses rising by an annual rate of 3.9% across the April to June period, an 11-year high. When adjusted for inflation, regular pay increased by 1.9% compared to the same period a year earlier, meaning that real wages are now growing at their fastest rate in nearly four years.
Commenting on the employment figures, ONS Deputy Head of Labour Market Statistics, Matt Hughes said: “Employment continues to increase, with three-quarters of this year’s growth being due to more women working. However, the number of vacancies has been falling for six months, with fewer now than there were this time last year.”
While this strong set of employment statistics does, therefore, confirm that the UK labour market continues to defy any signs of a Brexit-related slowdown, there are concerns that the figures could prove to be a high-watermark. Demand in the labour market typically lags significantly behind changes in output and economists are still warning that a Brexit effect is likely to become apparent in future sets of employment data.