UK employment down as wage growth stalls

The total number of people in work has fallen again, while wage growth has also dropped, official figures reveal.

Last month, the Office for National Statistics reported employment had fallen for the first time since April 2013, and officials have now confirmed the trend continued into June.

For the three months to June 2015, total employment was 31.03 million, down 63,000 on the three months from January to March, equivalent to a drop of 0.2 per cent.

However, the total number of people in work remains 354,000 above the total in work at the same point in 2014.

73.4 per cent of people aged 16 to 64 are in work, up from 72.8 per cent last year, but flat on last month’s figures.

Compared to the three months to March 2015, the total number of unemployed people seeking work increased by 25,000 to 1.85 million, although this is also 221,000 lower than a year earlier.

Regular pay for employees rose by 2.8 per cent on a year-on-year basis in the three months to June to an average of £463 per week before tax. 

Total pay, which includes bonuses, increased 2.4 per cent to £488 per week.

However, the increases represent a slowing of growth, which was 3.2 per cent for total pay for the three months to May 2015.

Hargreaves Lansdown senior economist Ben Brettell says the figures may represent the UK jobs market “leveling off”.

He says: “While disappointing, these figures should not prove cause for concern. The magnitude of the rise in unemployment was small enough to leave the overall rate unchanged at 5.6 per cent, and the pace of job creation has been expected to slow for some time as the recovery matures.

“Growth in pay, although slower, remains robust, and combined with zero inflation this is good news for the UK consumer. This in turn should be positive for economic growth, which I expect to pick up during the second half of the year.

“It is possible that the disappointing labour market performance in the second quarter was due to firms postponing hiring new workers because of uncertainty over May’s election. If that is the case, we should see a resumption of the labour market recovery in the third quarter.”

Labour acting shadow work and pensions secretary Stephen Timms says the second monthly jobs fall is “worrying”.

He adds: “With productivity stagnating, David Cameron and George Osborne must take bolder action to raise jobseekers’ skill levels to get more back into work and help build the high-skilled workforce Britain needs.”