Jobless numbers down but paltry wage growth recorded
The employment rate for the period was 75.1%, the highest since comparable records began in 1971, according to the Office for National Statistics (ONS).
There were 32.07 million people in work during April to June 2017, 125,000 more than the preceding three months and 338,000 more than recorded in the previous year.
The ONS notes there were 883,000 people employed on ‘zero-hours contracts’ as their main job, down 20,000 from a year earlier.
Unemployment over the three months was 4.4% down from 4.9% recorded a year earlier, with a total of 1.48 million people not in work. This level is the lowest since 1975 and is 57,000 fewer than for the three months to March 2017 and 157,000 fewer than for a year earlier.
While the labour market data shows positive signs, average weekly earnings for employees in real terms (adjusted for inflation) fell by 0.5%, both including and excluding bonuses, compared with a year earlier.
Where the figures aren’t adjusted for inflation, employees’ wages increased 2.1% (including and excluding bonuses).
The average total pay for employees was £506 a week.
‘Wage growth is the missing piece of the puzzle’
Maike Currie, investment director for personal investing at Fidelity International, said while wage growth has come in slightly better than expected at 2.1%, inflation is still outpacing earnings so “in the post financial crisis world, wage growth continues to be the missing piece of the puzzle”.
She said: “For the past ten years our earnings have flatlined. This could be down to automation, more people working part-time and the growing cohort of self-employed people with limited earning power, such as Uber and Deliveroo drivers in the so-called ‘gig economy’.
“Unfortunately, the outlook doesn’t look much brighter for Britain’s workers. The latest report from Chartered Institute of Personnel and Development says employers are predicting an average of 1% increase in wages in the next year, while the Bank of England has pointed out that uncertainty over the economic outlook may be affecting companies’ willingness to raise pay – it expects regular pay growth to remain subdued for the rest of 2017.
“Paltry wage growth coupled with stubbornly high inflation, means our earnings continue to lag price rises. As each month rolls by UK households are getting progressively poorer. This means our savings and investments need to work even harder. Be careful of leaving your money languishing in cash. It may be a safer option than the stock market but with lower-for-longer interest rates, it’s likely you’ll be losing out over the long term.”