Job market experiences surprise upturn in fortunes last quarter

The main headlines from figures released by the Office for National Statistics concerning the state of the UK labour market reveal that, much to the surprise of many experts, the number of people in work rose while unemployment fell. Between May and July this year, 80,000 more people entered the job market, while the unemployment rate fell to 7.7% or 24,000 people in real terms.

In total, 29.84m are in some form of employment, which equates to almost half the entire population of the UK. Of that total, an astonishing 8.05m are in part-time jobs, which may hint at underemployment being an issue which needs to be wrestled with. The creation of so many part-time roles might also suggest that the fall in unemployment isn’t quite what it might seem.

Settling for less?

The creation of so many part-time roles might be handy for people such as university students and parents of young children, but for jobseekers hoping for better hours and higher wages, the comparative lack of full-time roles might tell them that there’s been no change. About the ONS’s announcement, Joshua Raymond from City Index had this to say:

“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.

Wages falling behind

Wage growth of late has been anaemic, standing at just 1.1% for the most recent quarter. The rate at which wages are growing is lagging far behind that of inflation, thereby making it hard for many to afford even the basics.

On this, Mr Raymond said: “Wage growth remains significantly below the rate of inflation which remains a threat to the power of the consumer and UK retailers. So whilst today’s jobless data is good news, we should not be getting the party balloons out just yet.”