Unemployment falls to 5.6%

Unemployment fell to 5.6% from December to February, according to the latest figures from the Office for National Statistics, meaning the UK has the highest employment rate since comparable records began in 1971.

They show that there were 1.84 million unemployed people, 76,000 fewer than for September to November 2014 and 416,000 fewer than for a year earlier. There were 8.99 million people aged from 16 to 64 who were out of work and not seeking or available to work such as stay at home parents, 104,000 fewer than for September to November 2014 but 11,000 more than for a year earlier.

The ONS says pay for employees in Great Britain has increased by 1.7% including bonuses and by 1.8% excluding bonuses in the last year. Tower Watson’s latest Salary Budget Planning report suggests wages will rise by an average of three per cent this year, up from increases of 2.5 per cent in 2014, with this rise being maintained in 2016.

The ONS says 78.3% of men and 68.6% of women aged from 16 to 64 were in work. In both cases these figures were higher than a year earlier.  However, the employment rate for men (78.3%) was lower than before the economic downturn of 2008 to 2009, when it peaked at 79.1% in late 2007/early 2008.

The employment rate for women (68.6%) was the highest since comparable records began in 1971, partly due to ongoing changes to the state pension age for women resulting in fewer women retiring between the ages of 60 and 65.

The number of men working full-time increased by 281,000 to reach 14.36 million while the number of men working part-time was little changed at 2.19 million. The number of women working full-time increased by 167,000 to reach 8.33 million while the number of women working part-time increased by 104,000 to reach 6.17 million.

Geraint Johnes, director at Lancaster University’s Work Foundation, said: “The labour market statistics released today reflect a continued strengthening. Employment has risen by some 248,000 over the last quarter, and unemployment has fallen by 76,000, with an additional large drop in the numbers of people economically inactive – particularly amongst those aged under 25. The overall unemployment rate now stands at 5.6%. The picture of falling unemployment is replicated within most regions – though small increases were recorded in Scotland, Northern Ireland and also in London and the South West.

“Gains have been particularly strong in full-time employment, with numbers increasing by 191000. Of these, 147000 are men. The number of full-time self-employed workers has fallen by 27000, possibly indicating a continued move toward job security.

“Industries performing strongly include construction, the real estate sector, and administrative and support services, all of which experienced job growth in excess of 30,000 over the quarter. Meanwhile numbers employed in health and social work declined over the quarter by some 30,000.”

He added that, excluding bonuses, the average pay increase is 2.2% and there have been gains of 3% or more in both the finance and the distribution sectors while in manufacturing there has been zero growth of regular pay.

Neil Carberry, CBI Director for Employment and Skills, said: “It’s great to see 248,000 more people in work, the fastest rise in employment in just under a year – thanks to our flexible jobs market.

“With real wage growth rising people have a little more money in their pockets. But we need to see a recovery in productivity before wages can rise faster.”