Wednesday, April 18, 2012
Better employment news, and a puzzled MPC
Posted by David Smith at 10:00 AM
Category: Thoughts and responses

Labour market statistics were better than expected, supporting the idea that recent growth in the economy has been stronger than official figures have suggested. These are the highlights:

"The employment rate for those aged from 16 to 64 was 70.4 per cent, up 0.1 on the quarter. There were 29.17 million people in employment aged 16 and over, up 53,000 on the quarter."

"The unemployment rate was 8.3 per cent of the economically active population, down 0.1 on the quarter. There were 2.65 million unemployed people, down 35,000 on the quarter. This is the first quarterly fall in unemployment since the three months to May 2011."

Some people are confused about the different measures of unemployment. The Labour Force Survey measure, now 2.65m, is not benefit-related - it measures people who declare themselves to be unemployed and available for work, whether in receipt of benefit or not. That is why it includes some 300,000 full-time students.

The claimant count rose by 3,600 to 1.61m, though data revisions mean it has been reported at around the 1.6m level for some months. It is also boosted to an extent by the shift of some people from other incapacity benefit to jobseeker's allowance.

Pay growth, however, remains very subdued: "Total pay (including bonuses) rose by 1.1 per cent on a year earlier, down 0.2 on the three months to January 2012. Regular pay (excluding bonuses) rose by 1.6 per cent on a year earlier, unchanged on the three months to January 2012." The release is here.

Also, the Bank of England's April minutes showed puzzlement over weak official statistics versus stronger surveys, a fear that those official statistics will show three successive quarters of declining GDP and a single vote (David Miles) of 25 billion for more quantitative easing. The minutes are here.