The latest large rise in employment figures of 345,000 in the three months to April 2014 compared to the three months to January takes the total number of those employed to 30.54 million.
The number of those that were unemployed fell by 161,000 to 2.16 million over the same period.
The unemployment rate has now dropped to 6.6 percent, well under the 7 percent that the Bank of England governor, Mark Carney, identified as a trigger for possible interest rate rises under ‘forward guidance’.
The number of economically inactive people also fell over the three month timescale by 80,000 to 8.82 million.
Looking at pay levels, pay including bonuses in the year to February 2014 increased by 0.7 percent and pay excluding bonuses increased by 0.9 percent. But the inflation measures of CPI and CPIH (which includes homeowner costs) increased by 1.7 percent and 1.6 percent respectively over the same period showing that pay is still under pressure.
The number of self employed people has increased by 337,000 between February 2013 and February 2014 and now stands at 4.54 million.
Martin Beck, senior economic advisor to the EY ITEM Club, commented:
“The stark contrast between a robust jobs market, but meagre wages growth continues. Despite the three months to March seeing the largest gain in employment since records began in 1971, there is no sign of a slowdown in jobs growth in today’s data. The number of people in work saw another record rise, while the ILO unemployment rate dropped again from 6.8% to 6.6%, the lowest in more than five years. Combined with the various jobs surveys all pointing to continued strong employment growth, the jobs market looks set to continue advancing.
“However, for the recovery to truly hit home, pay packets need to start growing again. Today’s further boost to employment does not feed into a pick-up in wage rises. In fact, annual earnings growth actually fell in April to the lowest level since March 2009 and well below CPI inflation in the same month. Timing dragged April’s growth rate down as the cut in the 50% tax rate in April 2013 encouraged high earners to delay bonus payments from March to April. But even with bonuses excluded, regular pay growth also declined in April. Overall while the demand for workers continues to strengthen, the signs show that this is being more than offset by the strength of labour supply.
“The MPC will be reassured by the continued absence of any wage-led inflationary pressure, which should dampen pressure from the more hawkish members of the Committee for a rise in interest rates. However, the implications for continued growth in consumer spending are more troubling. For now at least, spending will have to continue to rely on more people entering employment rather than any sizeable boost to individual consumer’s spending power.”
Georgios Nikolaidis, Economist at PCG said:
“We have seen a significant rise in the number of people choosing to become their own boss in every set of labour market statistics annually since 2000. It is particularly exciting to see people from all walks of life realise that starting a business isn’t just something other people can do.
“Today’s figures from the ONS show self-employment grew again by 1.6% on the last quarter and 8% on last year to reach 4,537 million – compared to a 1% and 1.8% respective growth in ‘traditional’ employment.
“The number of people under 30 choosing to go freelance has risen by 38% while the number of freelance mothers has gone up by 25%. These are both groups not traditionally associated with starting a business and it is encouraging to see this perception finally changing.
“The confidence to go it alone is clearly spreading across the entire workforce and this can only be good news for our economy. Self-employment really is the future of work.”