The Monetary Policy Committee is relieved after ONS figures showed that from January to March the number of people in full-time employment rose by 118,000.
The International Labour Organisation measure of unemployment fell by 55,000 over the quarter to 2.46 million, while the unemployment rate fell to 7.7% over the same period. However, the claimant count measure of unemployment – which records the number of people claiming Job Seekers’ Allowance – rose to 1.47 million, its highest level since September last year. For the change over 12-months there are 43,400 fewer claimants than at this point last year.
In addition to this news was the fact that a rise in average weekly earnings also remained at a level low enough to stave off fears of a price/wage spiral. After inflation jumping to 4.5% – the highest level seen in two and a half years – this recent stability has eased the worries of those at the MPC.
The employment figures have shown that GDP figures on projected growth for the quarter may be relatively pessimistic considering the upturn in the number of people employed.
Average weekly earnings growth is some way below the pre-recession average of a little over 4%. Across the whole economy average earnings growth was 2.3% in first quarter. While this was slightly higher than in February, this is because of increased bonuses in Finance and Business services. When these bonuses are excluded, average pay growth actually fell from 2.2% to 2.1% between February and March.
Numbers of part-time employees are declining while the number of people in full-time jobs is increasing. Statistics also show that the number of actual hours worked in the economy ultimately fell over the past three months. It could be, then, that pay awards are rising a little more quickly than GDP figures suggest.