This ‘one step forward, two steps back’ jobs data shows new jobs are still being created, real wages continue to fall – and yet unemployment has ticked up. Contributor Tara Sinclair, Economist and senior fellow at the global job site – Indeed.
While the increase in the jobless rate is modest, the last three months of 2017 saw the first quarterly increase in unemployment for nearly two years. And yet at the same time 88,000 more people entered work compared to the previous quarter. Such apparently contradictory numbers are a symptom of the stretched labour market’s mixed messages.
With employers’ demand for new staff remaining strong – despite Brexit uncertainty – Bank of England data shows the jobs market is now tighter than it has been for two decades. One of the great enigmas of 2017 was why this tightness didn’t drive up the average Briton’s paypacket. Despite some modest progress at the end of last year, wage rises still aren’t keeping up with the UK’s stubbornly high inflation.
What rises there are aren’t for everyone, and the Bank of England’s data also reveals the cost of staying put. People who moved jobs last year saw their earnings rise by an average of 7.3 percent, while those who stayed in the same role received an average rise of just 2.6 percent.
If nothing else, today’s jobs report shows just how finely balanced the tight labour market has become. The coming months are likely to see the pace of job creation slow, leaving another awkward question – will the economy have to trade employment growth for wage rises?
