15 November 2017

News

CBI/Pertemps Labour Market Update November 2017

Employment falls slightly and real pay growth remains negative, but the unemployment rate stays at a 42 year low

CBI/Pertemps Labour Market Update November 2017

CBI/Pertemps Labour Market Update November 2017

Today’s ONS release paints a mixed picture of the UK labour market. Employment has fallen slightly for the first time in over two years. It is a notable change, though we should be cautious about drawing long-term conclusions from one quarter’s data.  

Unemployment continues to fall, and remains at a 42-year low. This is welcome news, though we should be mindful of any complacency, as there was a slight increase in the numbers registered as long-term unemployed. 

Falls in both headline employment and unemployment levels are explained by a significant increase in the numbers registered as economically inactive. 

Real wages continued to fall, and have now been negative for seven months in a row. In the three months to September 2017, real regular pay (excl. bonuses and adjusting for CPIH inflation) fell by 0.5%.

Despite this hampered pay growth, there is positive news on the productivity front, with labour productivity - output per hour – increasing markedly by 0.9% in Q3. This follows two quarters of negative output growth. Maintaining this positive development in labour productivity will be essential to reversing declining real wage growth.

Some regions continued to see employment rise, but by no means all. However, no part of the country saw any increase in unemployment.