20th July 2016
The UK unemployment rate has fallen to 4.9% the lowest since 2005. The number of people in employment between March and May reached 31.70 million people an employment rate of 74.4% the highest since records began in 1971.
The number in work was 176,000 more than for the 3 months to February 2016 and 624,000 more than for a year earlier according to the Office for National Statistics.
There were 23.19 million people working full-time, 401,000 more than for a year earlier and 8.52 million people working part-time, 223,000 more than for a year earlier.
There were 1.65 million unemployed people (people not in work but seeking and available to work), 54,000 fewer than for the 3 months to February 2016, 201,000 fewer than for a year earlier and the lowest since March to May 2008.
There were 903,000 unemployed men, 108,000 fewer than for a year earlier. There were 742,000 unemployed women, 93,000 fewer than for a year earlier.
The unemployment rate was 4.9%, down from 5.6% for a year earlier. The last time it was lower was for July to September 2005. The unemployment rate is the proportion of the labour force (those in work plus those unemployed) that were unemployed.
There were 8.87 million people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 46,000 fewer than for the 3 months to February 2016 and 181,000 fewer than for a year earlier.
The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.6%, the lowest since comparable records began in 1971.
Average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.3% including bonuses and by 2.2% excluding bonuses compared with a year earlier.
Paul Hollingsworth UK economist at Capital Economics said: “The vote to leave the EU will almost certainly now cause some firms to put hiring decisions on hold or cut back headcounts altogether.
“Indeed, we expect the unemployment rate to begin to drift up over the coming quarters. The upshot is that these may be the best set of labour market figures for a while,” said Paul Hollingsworth, UK economist at Capital Economics.”
Ben Brettell, Senior Economist, Hargreaves Lansdown says: “Today’s unemployment and wage growth numbers from the ONS cover the three months to the end of May. As such they reflect pre-referendum conditions and can be taken with a large pinch of salt. Nevertheless, the signs are mildly encouraging, with unemployment falling to an 11-year low of 4.9% and wages growing by 2.3% year-on-year.
“In an interesting quirk of the data, the ‘claimant count’ figure released today is from June, so is a little more up-to date. An increase of 4,000 people claiming unemployment benefit was forecast, so the actual figure of 400 comes as something of a positive surprise.
“The post-referendum reality will gradually become clear over the next few months, and Friday’s preliminary PMI data will provide the first indication of economic activity since the vote. Brexit has added a significant amount of uncertainty, and it is perfectly possible that firms will delay hiring decisions until they have greater confidence. In a survey of more than 1,000 business leaders conducted by the Institute of Directors, a quarter of respondents said they would freeze recruitment and 5% said they expected to lay workers off.”