Britain’s jobs market showed potential signs of losing momentum after years of impressive growth while the recent pay squeeze deepened further, the Resolution Foundation said today (Wednesday) in response to the latest labour market figures.
Today’s figures show that the UK employment rate dipped slightly from its recent peak, with recent falls concentrated among the under 50s, self-employment (down 0.8%) and temporary employment (down 0.6%). Average hours have also seen a 0.5% fall.
However, jobs growth over the past year remains strong with young people (aged 25-34) in particular enjoying impressive gains (from 82% to 83.6%), suggesting that more data will be needed to know whether the recent dip is a blip or the start of the labour market plateauing.
Britain’s pay squeeze tightened to -0.5 per cent in the three months to September, and the Foundation expects real pay growth to remain weak in the next two months.
The biggest pay squeeze is taking place in other service sectors (-2.7%), public administration (-2.2%) and real estate (-1.9%), while pay growth is strongest in agriculture (+3.9%) and in support services (+0.8%), aided by April’s increase in the National Living Wage.
Strong productivity growth in the third quarter of 2017 (+0.9%) offers some hope that wage pressures may follow.
Stephen Clarke, Economic Analyst at the Resolution Foundation, said:
“After years of impressive growth, there are signs that the labour market may be losing momentum.
“The still strong picture on employment still refuses to have any meaningful impact on wage growth, as Britain’s pay squeeze is getting deeper.
“Today’s welcome productivity figures offer a glimmer of hope on pay, though it’s too early to say whether it can grow into a meaningful recovery.”