Unemployment edges up

Unemployment rose slightly between March and May, the first quarterly fall since early 2013, according to the Office for National Statistics.

For March to May 2015, there were 30.98 million people in work, 67,000 fewer than for the three months to February 2015. The ONS says the fall is mainly due to fewer self-employed people.

The number of men working full-time increased by 142,000 to reach 14.34 million, but the number of men working part-time fell by 36,000 to reach 2.12 million. The number of women working full-time increased by 130,000 to reach 8.38 million and those working part-time increased by 29,000 to reach 6.15 million.

However, while the number of employees increased by 428,000 to reach 26.31 million, the number of self-employed people fell by 131,000 to reach 4.47 million. The average rate of wage growth remains unchanged at 2.7%.

Neil Carberry, CBI Director for Employment and Skills, said: “While it is disappointing to see that employment has fallen, this is largely due to reductions among those self-employed.

“This fall must be seen against the backdrop of strong employment growth since the end of 2013, so it is far too early to draw conclusions. Nevertheless, it offers a timely reminder of the importance of Government treading carefully in the labour market and protecting the flexibility that gives Britain a great record on jobs.”

Mark Beatson, CIPD Chief Economist, said: “The new figures suggest that the recent increases in employment may be starting to level off, which appears to be hitting the short-term unemployed and young people in particular. The government needs to ensure that it maintains an adequate level of support for people becoming unemployed alongside its quite justified focus on support for the long-term unemployed and other disadvantaged groups in the labour market.

“The three-month average rate of wage growth remains unchanged at 2.7%. However, this disguises a ‘tale of two workforces’; where the living standards of workers in sectors such as manufacturing and public sector are falling further behind other booming sectors such as construction and finance. Inflation is unusually low and many firms are still not having pay reviews either because they see no need to put wages up, or are awarding low pay rises because they say they can’t afford to pay more. Looking ahead, there is also a question of whether some employers might change how they set pay in anticipation of the proposed National Living Wage, especially in low paid sectors.

“This period of low inflation creates a window of opportunity for firms to complement rising investment in capital equipment with increased investment in their own people; especially given the welcome increase in the investment allowance announced by the Chancellor. This doesn’t mean spending a fortune, what matters is relevant learning opportunities delivered in a way that suits employees and – most important of all – jobs designed to give employees the chance to use these skills.”

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