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Record 32.7m in work as jobless rate drops to 3.9 per cent

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Record 32.7m of people are in work as jobless rates falls to 3.9%, the first time the jobless rate has fallen below 4% since 1975.

New research shows that average earnings have increased by 3.4% in the year to January, down by 0.1% on the previous month outpacing inflation.

In the quarter to January employment increased by 222,000 to 32.7m, this is the highest it has ever been since records began in 1971, the Office for National Statistics (ONS) said.

Unemployment has fallen by 35,000 to 1.34m, 112,000 lower than last year, jobless rate is 3.9% below the EU average of 6.5%.

Economically inactive people dropped by 117,000 in the last three months, to 8.55m the lowest on record.

Job vacancies have increased by 4,000 to 854,000.

Matt Hughes, ONS senior statistician said, “The employment rate has reached a new record high, while the proportion of people who are neither working nor looking for a job, the so-called ‘economic inactivity rate’ is at a new record low.

“The unemployment rate has also fallen below 4% for the first time since early 1975.”

Simon Harvey, FX Market Analyst at Monex Europe said, “Sterling rallied briefly as the ONS data was released prematurely and signalled that the UK labour market remains resistant to Brexit uncertainty, for now.

“Wages continued to grow at a steady pace, despite the expected slowdown in the new year. The release bodes well for the Bank of England who previously calmed investors nerves of a rate cut by pointing to the record tight labour market propping up growth and inflation.

“Despite today’s positive economic data being overshadowed by events in Westminster, the release may ultimately give Carney more fodder to stave off Brexit related questions on Thursday’s Bank of England meeting.

“However, a slump in the labour market’s progress may be on the horizon. Job-to-job flows in the fourth quarter of 2018 dipped off from the post-recession high in Q3, hinting that the average worker’s confidence to change jobs to seek a higher wage took a hit.

“Although this is only one data release, the theme is consistent with consumers spending pivoting away from non-essential to essential items in the first few months of 2019, hinting that Brexit is starting to take its toll.”

Pawel Adrjan, UK economist at the global job site Indeed said, “After years of stagnation, average wages are finally rising at a respectable rate. On the recruitment front line, the combination of skills shortages and yet another record high in employment is forcing many employers to ramp up salaries to attract staff.

“While the average worker may notice little difference to their monthly earnings, a lucky few with specialist skills are seeing their pay rise at double-digit rates.

“In sectors where there are long-term shortages of skilled staff, such as dentistry, insurance underwriting and industrial engineering, the battle for talent is morphing into an all out salary arms race.

“Analysis of the hundreds of thousands of job vacancies advertised on Indeed found that dentists’ salaries rose by a breathtaking 25% between March 2018 and March 2019.

“Vets have seen their advertised salaries rise by 10% on average over the same period, and insurance lawyers and underwriters by 21%.

“Endemic shortages in these sectors have historically made them reliant on attracting talent from abroad. But with early signs showing that it is becoming harder to lure skilled workers from the EU, that reliance is forcing employers to ramp up salaries at an ever more dizzying rate.”




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