Unemployment at lowest rate since 1970s

By Gill Harris on 22 August, 2018

Unemployment is at 4%, the lowest rate since the 1970s, according to the latest figures from the Office for National Statistics.

The Labour Force Survey shows that in the second quarter of 2018, the number of unemployed people decreased, but the number of people aged from 16 to 64 years not working and not seeking or available to work (economically inactive) increased.

There were 32.39 million people in work, 42,000 more than for January to March 2018 and 313,000 more than for a year earlier.

At 4%, this is the lowest unemployment rate since December 1974 to February 1975. The employment rate was 75.6%, unchanged compared with January to March 2018 but higher than for a year earlier (75.1%).

Ian Larrard, director of Swindon & Wiltshire Initiative, Business West, said: “Government will no doubt highlight the fact that unemployment is at its lowest level since the 1970s, but we must remember that this figure is slightly misleading, given that it is a reflection of the claimant count, rather the total number of the UK adult population who find themselves out of work.

“A much better indicator of the health of the UK labour market is the employment rate and this has remained static. The wage growth that we saw in the last set of ONS figures similarly refuses to budge.

“Perhaps the most worrying statistic for businesses is an increase in unfilled job vacancies spurred by falling immigration from the EU. Some 2.28m EU nationals were working in the UK between April and June 2018. This is 86,000 less than the same period in 2017; making it the largest annual fall since records began in 1997. What this exposes is a national education and training system that is struggling to cope with the demands of British businesses in terms of skills, and this a worrying sign with Brexit looming.

“One positive we can take from the latest set of ONS results is the unemployment rate amongst 16 to 24-year-olds, which was at its lowest since records began. While this can of course be caveated due to the fact that the unemployment rate reflects those claiming benefits; the fact that the number of young people not in employment, education or training overall is low and getting lower is news to celebrate.”

The ONS figures show there were 780,000 people in employment on “zero-hours contracts” in their main job, 104,000 fewer than for a year earlier.

Latest estimates show that average weekly earnings for employees in Great Britain increased by 2.7% compared with a year earlier.

Pictured: Ian Larrard, director of Swindon & Wiltshire Initiative, Business West