GM Chamber comments on ONS labour market data -lowest unemployment in 42 years, but wages fall in real terms
Commenting on today’s release of labour market data by the Office for National Statistics, Christian Spence, head of research and policy at Greater Manchester Chamber of Commerce, said:
“The latest data shows continued resilience in the UK labour market with unemployment falling 57,000 in the last quarter to 4.4%, the lowest unemployment rate since 1975. Employment increased by 125,000 since the first quarter reaching a record employment rate 75.1%, with inactivity also falling to record lows.
“In Greater Manchester, Jobseekers’ Allowance claims have fallen to a record low with around 22,000 people claiming this benefit, a rate of 1.2% which is comparable to the UK overall.
“However, whilst our members through our recent Quarterly Economic Survey continue to report increasingly strong recruitment difficulties with the labour market so tight, it appears that unemployment remains above the level at which wage inflation will start to increase pay for employees overall. Average weekly earnings increased by 2.1% which, in real terms, is a 0.5% fall. This is likely to continue to squeeze household expenditure across the coming months, creating a downside pressure on economic growth overall.
“Our forecasts are for UK growth of 1.6% this year and 1.5% in 2018, with Greater Manchester’s economy expected to outperform the national average at around 3.25% growth in 2017.”