The figures from the Office of National Statistics have shown the number of people claiming benefits has fallen the most in 16 years, dropping by 41,700 to 1.35m – the lowest level since January 2009.
But it's unlikely markets will freak out, anticipating a speedier hike in the base rate from Bank of England governor Mark Carney: the unemployment rate is still 7.7%. Lest we forget, unemployment is Carney’s economic indicator of choice: he has pledged to keep interest rates at rock-bottom until the it falls to 7% - something which still looks likely to take a while - just as Carney predicted.
According to the figures, the number of people in employment in the UK during the three months to August was 29.87 million – the highest level since equivalent records began in 1971.
‘Today’s figures show a rise in employment of more than a million under this government, and they show that there are now more people in work than ever before,’ said Esther McVey, the newbie employment minister and former TV presenter.
‘We are not complacent — there’s still work to do — but with more than 500,000 vacancies currently available, and with all the signs being that the economy is turning a corner, we can see that there are opportunities out there for hard-working people who aspire to get on in life.’
The employment results are another stick for the government to bang its drum with as we head towards the next general election. But there are still some underlying issues coming through.
Youth unemployment has hardly stirred, not boding well for future economic health – this comes after the OECD’s research last week, which showed weakness in the UK’s youth skill levels.
‘Youth unemployment remains stubbornly high, and long term unemployment has only just begun to fall, so there is a real need to step up efforts to ensure our young and long term unemployed aren’t left out of the labour market recovery,’ said CIPD chief economist Mark Beatson.
Also noted was the slow rise in wages. Over the three months in question, total pay rose by only 0.7% - well below the current inflation level of 2.7% and worrying for households facing increasing energy bills.
‘Just as employment losses during the recession were lower than expected, so too are employment gains with recovery,’ said Graeme Leach, chief economist at the Institute of Directors.
‘This isn’t a jobless recovery but it is a job-lite one. Over the course of the next year we expect the picture to improve as higher output stimulates higher productivity and a subsequent pick-up in both employment and wage growth.’