A delay in publishing unemployment and inactivity numbers presents us with a slightly murky picture when it comes to the UK labour market, but there’s still plenty that can be gleaned from today’s figures.
The headline grabber will undoubtedly be the news that average pay growth has outstripped inflation for the first time in almost two years. It means hard working Brits should begin to feel the benefit of those extra pennies in their pay packets when doing the household budgets.
But it’s important to note this is an average number. Not every worker will have had a pay rise and there are clear differences between the public and the private sector.
What the Bank of England’s MPC members will be considering is that though pay growth is high it isn’t rising as quickly as it had been.
Employers are beginning to feel the stress of the last couple of years and vacancy numbers have dropped back again.
As the labour market unwinds a bit the pressure on bosses to pay more to keep skilled workers will ease and for many employers that will be a welcome relief as their own budgets come under increasing strain.
We don’t know the extent to which cracks are developing with those unemployment numbers which have been delayed for a week whilst the data is interrogated further by the ONS, but we can see from the latest PAYE numbers that the number of payrolled workers dropped back in August.
Companies carefully considering the economic climate are likely to be delaying any big investments and certainly some will be feeling the squeeze brought on by increases to their own payrolls.
Uncertainty is a jobs killer and there’s a whole lot of that around as economic growth stumbles forward – but only a bit – and recession nips at its heels.
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