Published: Thu, November 16, 2017
Economy | By Melissa Porter

Wage squeeze continues as unemployment continues to fall

Wage squeeze continues as unemployment continues to fall

This means unemployment in Scotland stands at 4% - which is below the United Kingdom average of 4.3%.

However, when the impact of inflation is factored in, real weekly wages fell by 0.4%, when including bonuses and by 0.5% when excluding bonuses, compared with a year earlier.

The number of unemployed decreased by 182,000 from previous year to 1.42 million in the third quarter.

Employment slid 14,000 in the quarter to September compared with the previous three months, in the largest drop since mid-2015.

Meanwhile, the number of employed workers fell for the first time since October past year, dropping by 14,000 to 32.06 million in the quarter to September, compared to the previous three months.

At the same time, the employment rate rose to 75 percent in July to September from 74.4 percent a year ago, but slightly down from 75.1 percent in the second quarter.

A further fall in unemployment may look positive, but ONS has expressed some concerns. And hiring growth appears to have lost some momentum, he said.

"And the weak figures did have the silver lining of an increase in output per worker to 0.4% from minus 0.1% in Q2".

Wage growth had stood at 2.3 per cent in the three months to August.

Sam Tombs at Pantheon Macroeconomics agreed that employment data can be volatile, but the stagnation of job vacancies indicates that employment growth will remain weak over the coming months, while the quality of job gains also has deteriorated with a slight fall in full-time employees largely offset by a rise in part-time and self employment.

ONS estimates show that there were 32.06 million people in work during the period to September 2017, 279,000 more than for a year earlier. The rate was well below the inflation.

"The failure of the drop in unemployment to feed through to higher pay remains the biggest conundrum pacing the Bank of England".

Recruitment and Employment Confederation Chief Executive Kevin Green commented, "Employers who are already struggling to fill roles will be concerned to see that the number of people out of work has fallen yet again, reducing the talent pool even further".

They cover a period which saw inflation climb to a five-year high of 3%.

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