This is the lowest it ‘s been since January 2006 and has gone down from 6% over the course of the last twelve months. In actual terms, this equates to some 110,000 people now in work who previously weren ‘t, bringing the total number of unemployed people to 1.71 million.
This is all round good news, particularly since a recent survey of economists conducted by Reuters revealed that they had been predicting unemployment to be slightly higher at 5.3% for this month. As a more or less direct consequence of the increased number of people in work, the total number of hours worked each week in the UK also rose, for the first time exceeding 1 billion.
Interestingly, while unemployment is at a 10-year low, the number of vacancies in the job market is the highest that they have been since records began back in 2001. There are now 747,000 jobs available in the UK.
While unemployment has shrunk, the report also showed that wage growth has continued to slow, with total pay going up by just 2.4% – a rise certainly, but one that is unlikely to be widely celebrated in the face of house price growth exceeding it consistently.
On the subject of stunted wage growth, David Freedman at the ONS said: “Earnings continue to grow in real terms, although at a slower rate than we have seen in recent months.”
Mark Carney weighed in, saying that the timing of the next interest rate rise (from 0.5%) will be tied to the rate of wage growth, with the former unlikely to come until the latter hits 3%.
In the meantime, houses continue to get more expensive, although recent reports have shown that, particularly at the top end of the market in London, house price growth is starting to moderate, slowly but surely.
A lot of this is down to the changes in the stamp duty system that came into play last year, as well as the newly announced stamp duty surcharge for buy-let properties that should have a positive effect on home ownership and prices generally, as more properties become available to buy rather than rent as a result.
Institute of Directors analyst Michael martins spoke positively about the ONS ‘s report, though expressed some degree of uncertainty about the future of wage growth.
He said: “The employment rate is at its highest ever level, the unemployment rate is down to its lowest since well before the crash at 5.2%, and youth unemployment ñ always a tricky problem to solve ñ continues to fall impressively.”
“What this means for wages and inflation over the next 12 months,” he went on, “is less clear. In theory, a tightening labour market should mean wage rises. This is the trend we saw throughout 2015. But wage growth has outpaced productivity for much of this year, and in the last few months pay increases have trailed off.”.