The ONS released the latest national labour statistics for the UK today showing a much bigger drop in unemployment than had been anticipated. Here are the highlights:
- The employment rate for those aged from 16 to 64 for September to November 2013 was 72.1%, up 0.5 percentage points from June to August 2013. There were 30.15 million people in employment aged 16 and over, up 280,000 from June to August 2013.
- The unemployment rate for September to November 2013 was 7.1% of the economically active population, down 0.5 percentage points from June to August 2013. There were 2.32 million unemployed people, down 167,000 from June to August 2013.
- The inactivity rate for those aged from 16 to 64 for September to November 2013 was 22.2%, down 0.1 percentage points from June to August 2013. There were 8.93 million economically inactive people aged from 16 to 64, down 22,000 from June to August 2013.
- Between October to December 2012 and October to December 2013 total pay and regular pay rose by 0.9%.
The results reinforce the picture of a strong pick up in business and employment, with Britain now only behind the US in the developed world, in terms of the pace of recovery.
The number of economically inactive people aged from 16 to 64 fell by 22,000 to reach 8.93 million.
Comparing September to November 2013 with a year earlier:
There were 450,000 more people in employment.
There were 172,000 fewer unemployed people.
There were 75,000 fewer economically inactive people aged from 16 to 64.
These numbers are better than even George Osborne could have hoped for with a consensus forecast of unemployment falling to 7.3% whereas it is now 7.1%. The rate is likely to fall below 7% much sooner than had previously been predicted, giving BOE governor Mark Carney quite a dilemma.
Will he hold to forecast guidance and start increasing interest rates as unemployment falls below the 7% threshold? I think the answer is no, and more likely the governor will adjust guidance in the light of the developing Goldilocks economy. Neither too hot nor too cold, low inflation allowing income growth, cost of living improvements, continuing reductions in unemployment, and with GDP growth estimated at 2.4% all being achieved at the same time!
Whether or not Chancellor Osborne is responsible he will claim the credit. His economic weather forecast might go something like this, heavy rain has passed, some occasional showers may occur overnight, quickly turning to warm sunny spells.
The economic sun is shining and its quite hard to see at the moment anything that might rain on the Chancellor's parade.