A tighter labour market is delivering more full time jobs, an uptick in pay growth and a drop in insecure work, but overall levels of insecurity and pay remain major concerns, the Resolution Foundation said in response to today’s labour market statistics.
The latest figures also show that we have seen the first rise in unemployment since June 2015, and largest rise since September 2011. Although we’ve seen an average rise of 80,000 in employment over three months, the underpinning story is one of increased volatility with a single month employment fall of 340,000 in December. This points to a plateauing of employment growth at near record highs.
This tighter labour market has brought the post-crisis growth in insecure work to a close as employers have to do more to attract workers. Full time work accounted for all of the growth in employment this year. There was no change in the number of people on Zero Hours Contracts or working part-time and self-employment has fallen by 20,000.
While the pay squeeze has continued with real pay falling by 0.3 per cent in today’s figures, there is also evidence of a tighter labour market feeding through to rising pay pressures with the fastest pay growth in a year. Nominal pay has grown at annual rate of 2.9 per cent over the last six months, and over 3 per cent in the private sector. This up from 1.7 per cent and 2 per cent a year ago.
Stephen Clarke, Senior Economic Analyst at the Resolution Foundation, said:
“It’s early days, but the evidence points to a plateauing in employment growth and pay pressure building. Hopefully, this means Britain is finally in line for a pay rise after nearly a year of stagnant wages.
“A tighter labour market also means less insecure work but we’re far from out of the woods. Overall levels of insecure work are still too high.
“Pay is yet to outpace inflation, but with pay growth the fastest it’s been in a year it should do so later in 2018, at least in the private sector.”