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17 December 2019 12:32

Unemployment United Kingdom Unemployment

UK unemployment falls 13,000 to its lowest level in 44 years as more women get jobs

Employment unexpectedly increased and hit a new record high in the three months to October, despite Brexit uncertainty and a string of new warning signs over Britain's economic health. The latest official jobs figures from the Office for National Statistics (ONS) published on Tuesday show unemployment still near record lows at 3.8%, unchanged on the previous quarter. The official employment rate rose to a record high of 76.2% between August and October 2019. Employers kept on hiring even in a period of heightened political uncertainty in the lead-up to Britain's previous October Brexit deadline. New statistics released by @ONS show that the employment rate is at a new record high of 76.2% pic.twitter.com/j5L36BX47F — DWP Press Office (@dwppressoffice) December 17, 2019 Official GDP figures last week showed Britain's economy growing at its slowest annual rate in seven years, with national output unchanged in October when analysts had expected a slight recovery.

Tej Parikh, cheif economist at the Institute of Directors, said employment levels were a "big plus point" for the economy but noted falling vacancies in official figures in recent months. Uncertainty and slowing global growth have also made businesses a bit more cautious in their recruitment plans, and vacancies are expected to continue falling into 2020," he said. Pawel Adrjan, UK economist at jobs site Indeed, said it was an "unsolved puzzle" why high employment was not accelerating pay growth. The latest employment figures suggest the UK jobs market remained resilient in the run-up to the October Brexit deadline, confounding the expectations of economists. The Office for National Statistics (ONS) reported that the number of people in employment had reached a new record high, as 24,000 more people in work - mainly women - took the total to 32.8 million in the three months.

Image: The ONS figures showed wage growth easing in the three months to October Vacancies and pay growth fell back, though wage rises continued to easily outstrip the rate of inflation - last measured at 1.5%. The ONS noted that wage growth eased from a rate of 3.7% to 3.2%, but it largely blamed the decline on high bonus payments being booked in October 2018 compared with October 2019. Economists had expected the data to show that hiring had fallen because it included the month of October and the run-up to the deadline for a withdrawal agreement with the EU - secured by Boris Johnson before he called the election. Previous employment reports had shown evidence of weakness emerging in the jobs market while separate ONS data, released earlier this month, had reported the economy growing at its slowest annual pace for seven years. The upbeat job figures did little to boost the pound as it headed back towards its pre-election result level versus the dollar, with investors reacting to the PM's decision to prevent MPs extending the Brexit transition period beyond 2020.

But in his analysis of the ONS figures Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: "Demand for labour remains strong enough to stop the MPC from cutting Bank Rate over the coming months." UK unemployment fell to its lowest level since January 1975 in the three months to October this year. The number of people out of work fell by 13,000 to 1.281 million, Office for National Statistics (ONS) figures show. The employment rate rose to an all-time high of 76.2%, with an increase of 24,000 taking the number of people in work up to a total of 32.8 million. ONS head of labour market David Freeman said: "While the estimate of the employment rate nudged up in the most recent quarter, the longer-term picture has seen it broadly flat over the last few quarters. "Uncertainty and slowing global growth have also made businesses a bit more cautious in their recruitment plans, and vacancies are expected to continue falling into 2020." Employment is at a record high and unemployment at a record low in October's figures, but the Office for National Statistics says that both are broadly flat.

Employment's previous record high was January's figure of 76.13%. For unemployment, the record has gone down from 3.797% in May to 3.757% in October's figures - a change of 0.04 percentage points. Coupled with the substantial fall in job vacancies and a hint of slowing wage growth, the emerging picture is less of rampaging record highs and more of decelerating demand for new workers. Unemployment fell by 13,000 to 1.28 million in the three months to October, official figures showed. The UK unemployment rate was estimated at 3.8%, 0.3 percentage points lower than a year earlier but largely unchanged on the previous quarter.

Pawel Adrjan, UK economist from job site Indeed, said: "With the employment rate still pushing the envelope of what is possible - clocking yet another record - and unemployment very low, wages should be rising faster than this." The change in unemployment was largely driven by a drop in the unemployment rate for women, which fell to a record low of 3.5% for the period. The unemployment rate for men also fell to 4%, some 0.2 percentage points lower than a year earlier. Meanwhile, the number of people in work increased by 24,000 to 32.8 million for the quarter, while the proportion of people in employment stayed flat at 76.2%. The figures also revealed that job vacancies dropped by 20,000 to 794,000, as the rate of decline continued to accelerate from the previous period. Nationally, the UK unemployment dropped to its lowest level in 44 years in the three months to October, as the number of unemployed women hit a record low. However, the reduction in unemployment came as wage growth stalled over the period and the number of job vacancies also shrank. The number of people claiming unemployment benefits decreased by 13,000 to 1.28 million for the quarter, the Office for National Statistics said. This was largely driven by a decrease in the unemployment rate for women, which fell to a record low of 3.5 per cent for the period. Meanwhile, the number of people in work increased by 24,000 to 32.8 million for the quarter, while the proportion of people in employment stayed flat at 76.2 per cent. Nationally, average total pay increased by 3.2 per cent in the quarter, as it slowed down from 3.6 per cent the previous month, the ONS said. The figures also revealed that job vacancies slid by 20,000 to 794,000, as the rate of decline continued to accelerate from the previous period. David Freeman, head of labour market and households at the ONS, said: "While the estimate of the employment rate nudged up in the most recent quarter, the longer-term picture has seen it broadly flat over the last few quarters. "Pay is still increasing in real terms, but its growth rate has slowed in the last few months."