Unemployment fall ends months of rises and pay improves

Wed, 14/10/2015 - 12:02 -- nick

Unemployment has seen a surprise fall of 79,000 in the last three months, bringing an end to a series of rises.

At 1.77 million or 5.4% of the working population the number out of work is at a seven-year low, and employment is also up to a new high of 73.6% according to the Office for National Statistics (ONS).

These opportunities were shared around: young people and the long-term unemployed also saw lower levels of joblessness.

There was more good news for workers, with pay rises now averaging 3% even as the inflation rate has moved down to -0.1%, meaning most employees should be feeling richer and spending more.

This doesn't take into account Chancellor George Osborne's future tax credit cuts which threaten to make poorer workers even less well-off.

A small fall in the number of self-employed people could be a good sign; as the economy recovers those who reluctantly registered to avoid unemployment may be moving back into real work.

The ONS has begun gathering statistics for Universal Credit claimants, showing 90,000 are now claiming the benefit. There is still doubt over whether Iain Duncan Smith's deadline for moving all working and workless claimants to his online system will ever be met, as it is struggling to cope with more complex cases.

Those poorer unemployed people who claim jobseeker's allowance are not sharing in the new opportunities; since the last quarter unemployment overall has fallen by 51,000 but claimant count only by 7,000.

Strangely there were no more job vacancies in the UK than in the previous three months, suggesting that the quality of jobs advertised can be more important than quality if the unemployed are to be able to afford to take them.

This quick reverse in the fortunes of the labour market mean it will need to be watched closely over the coming months to see if volatility is the new normal.

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