UK Employment Climbs To New Record, Jobless Rate Unchanged

UK employment increased further in the three months to December to set a fresh record, while joblessness remained unchanged, indicating the resilience of the labor market amid the uncertainty surrounding Brexit and the general election.

The number of employed rose 180,000 from the previous three months, figures from the Office for National Statistics showed on Tuesday, which exceeded the 145,000 growth economists had forecast.

Job growth was mainly driven by quarterly increases for full-time workers by 203,000, which was the largest increase since March to May 2014, and for women by 150,000, which was the biggest gain since February to April 2014.

The number of women working full-time increased by 150,000, marking the largest rise since November 2012 to January 2013.

The employment rate rose by 0.4 percentage points to a record high of 76.5 percent.

The number of unemployed fell by 16,000 people quarterly to 1.29 million, while the jobless rate was unchanged at 3.8 percent as expected. The rate was the joint lowest since early 1975.

The economic inactivity rate fell by 0.3 percentage points to a record low of 20.5 percent in the three months to December.

Meanwhile, vacancies grew by 7,000 to 810,000 for the November to January quarter.

However, pay growth slowed with the annual growth in average weekly earnings including bonuses easing to 2.9 percent from 3.2 percent in November. Economists had forecast a 3 percent increase.

Total pay excluding bonuses fell to 3.2 percent from 3.4 percent. Economists had expected a 3.3 percent growth.

“In real terms, regular earnings have finally risen above the level seen in early 2008, but pay including bonuses is still below its pre-downturn peak,” ONS Deputy head of labor market statistics Myrto Miltiadou said.

Further, the ONS reported that the labor productivity, or output per hour, grew 0.3 percent sequentially in the fourth quarter of 2019, thanks to the gross value added growing faster than hours worked.

ING economist James Smith said lower wage growth is unlikely to influence the Bank of England. “We think the bar for cutting interest rates will still be set relatively high in the next couple of meetings,” the economist said.

“Barring a material deterioration in growth, we expect rates to remain on hold this year.”

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