The latest labour market statistics from the Office for national Statistics shows that the employment rate is up and the unemployment rate is down as is the inactivity rate for the period June to August 2013.
This will all come as good news for The Chancellor, George Osborne, and his 'Plan A'.
The main points from the ONS are as follows (a short video on this can be seen below):
The employment rate for those aged from 16 to 64 was 71.7%, up 0.3 percent from March to May 2013 and up 0.4 from a year earlier. There were 29.87 million people in employment aged 16 and over, up 155,000 from March to May 2013 and up 279,000 from a year earlier.
The unemployment rate was 7.7% of the economically active population, down 0.1 percent from March to May 2013 and down 0.2 percent from a year earlier. There were 2.49 million unemployed people aged 16 and over, down 18,000 from March to May 2013 and down 40,000 from a year earlier.
The inactivity rate for those aged from 16 to 64 was 22.2%, down 0.2 percent from March to May 2013 and down 0.3 percent from a year earlier. There were 8.95 million economically inactive people aged from 16 to 64, down 83,000 from March to May 2013 and down 88,000 from a year earlier.
Total pay rose by 0.7% compared with June to August 2012. Regular pay rose by 0.8% over the same period.
Comparing the June to August period with a year ago there were 279,000 more people employed, 40,000 fewer unemployed and 88,000 fewer economically inactive people between the ages of 16 to 64.
Commenting on the figures Sasha Nugent, Caxton FX analyst, said:
"An impressive claimant count change number from the UK points towards an improving labour market, however the issue of living standards remain. Average earnings slowed to 0.7% 3months to August compared with last year, and this highlights that although less people are claiming jobless benefits, we need to see the improved labour conditions reflected into better earnings. It is only when we see living standards improve that we can claim more confidently that the UK economy is improving."
Neil Carberry, the CBI’s Director of Employment and Skills, said:
“Today’s figures suggest that the more positive economic outlook is beginning to flow through to the jobs market. However, overall unemployment remains high.
“It is really encouraging that today’s increase in employment is almost entirely driven by a rise in full-time work and that long-term unemployment has begun to drop.
“However, it is clear that pay restraint is underpinning employment growth so we must ensure that minimum wage policy continues to reflect the wider labour market to ensure people aren’t priced out of opportunities to work.”
Nida Ali, economic adviser to the EY ITEM Club, commented:
“Another chunky increase in employment is encouraging and chimes in with positive developments in the wider economy. But the stagnation in the unemployment rate, which has been stuck in a range between 7.7%-7.9% for the last 12 months gives credence to our forecast, that unemployment will fall below 7% only by mid-2015. Indeed, the single month estimate has the unemployment rate increasing for the second consecutive month in August to 8.1%.
“As yet, higher employment is putting no upward pressure on wages, with earnings growth falling further from 1% to 0.8%. The fact that public sector pay actually fell compared to a year earlier, and that the rate of decline in wage growth in financial and business services accelerated compared to the previous three months, suggests that the squeeze on households is still intact.
“However, rising employment and a shortage of skills should allow workers to bargain for better wages in the future, and with inflation set to fall in the months ahead, the gap between the two should keep narrowing. Indeed, the CBI's latest survey on education and skills reported a stubborn shortage of skills in the UK and this should put a marked upward pressure on wages. As such we expect the squeeze on household finances to ease gradually, which should allow the consumer sector to continue driving growth.”