UK jobless rate falls to new 43-year-low, but pay growth weakens

Tuesday’s official figures also showed the sharpest annual decline in the number of EU workers in Britain since 1997. (Reuters)
Updated 14 August 2018

UK jobless rate falls to new 43-year-low, but pay growth weakens

  • The figures painted a largely familiar picture of a tight labor market — including a record number of job vacancies — failing to translate into strong wage growth
  • Total annual wage growth slowed to a nine-month low of 2.4 percent, below forecasts for it to hold at 2.5 percent

LONDON: Britain’s unemployment rate fell to its lowest in over 43 years in the three months to June and fewer workers made do with insecure jobs, but there was little upside for most as pay growth slowed to its weakest in nine months.
Tuesday’s official figures also showed the sharpest annual decline in the number of EU workers in Britain since 1997, continuing a trend seen since the 2016’s vote to leave the EU, and a pick-up in annual productivity growth.
Despite some positive elements, the figures painted a largely familiar picture of a tight labor market — including a record number of job vacancies — failing to translate into strong wage growth.
Britain’s economy warmed up a little in the second quarter from its winter slowdown of early 2018, official data showed last week, but there was no sign of an end to its lackluster performance in the run-up to next March’s Brexit.
“This will not be what the Bank of England will have wanted to see, as one of the justifications for (its) decision to hike rates earlier this month was that it was expecting wage growth to start lifting off.
This hasn’t happened yet,” said Emma-Lou Montgomery, an associate director at Fidelity International.
The BoE raised interest rates on Aug. 2 for only the second time since the financial crisis.
Tuesday’s data showed productivity grew at its fastest annual rate since late 2016 and the number of people whose main job was an insecure zero-hours contract fell by the most since 2000, the Office for National Statistics said.
The unemployment rate fell to 4.0 percent in the April-June period, the Office for National Statistics said.
That was the lowest since the three months to February 1975 and beat economists’ forecasts in a Reuters poll for it to hold steady at a previous low of 4.2 percent.
The drop came despite a smaller-than-expected number of jobs created over the three-month period, 42,000 — less than half the average forecast by economists in a Reuters poll.
Sterling briefly rose above $1.28 against a broadly weaker dollar, as Tuesday’s data helped a struggling pound move away from 13-month lows plumbed last week.
Total annual wage growth slowed to a nine-month low of 2.4 percent, below forecasts for it to hold at 2.5 percent.
The ONS said changes to the timing of annual bonus payments was partly responsible.
Excluding bonuses, pay growth fell to 2.7 percent, well below the 4 percent rate typical before the financial crisis a decade ago.
Output per hour worked grew by 1.5 percent year-on-year in the April-June period, the biggest increase since late 2016 after a 0.9 percent rise in the first quarter of 2018.
With less than eight months until Britain is due to leave the European Union, the ONS data showed an acceleration of EU nationals leaving Britain’s workforce.
In the second quarter there were 2.35 million EU nationals working in Britain, down 86,000 on a year ago, the largest fall since records began.
“Shortages are already hampering firms’ ability to compete and create jobs, so it’s vital that the UK pursues an open and controlled post-Brexit immigration policy,” Matthew Percival, head of employment at the Confederation of British Industry, said.
The number of nationals from the eight East European countries that joined the EU in 2004 fell by 117,000, an 11.7 percent drop on the year. That was partly offset by a 54,000 increase in Romanians and Bulgarians.
The number of workers employed on often-precarious zero-hours contracts fell to 780,000, or 2.4 percent of the workforce, the lowest since 2015.


Saudi labor force figures on the rise before pandemic

Updated 08 July 2020

Saudi labor force figures on the rise before pandemic

  • Trend driven by increase in female employment, but second quarter data will reveal impact of virus on jobs

RIYADH: Saudi unemployment dipped below 12 percent in the first quarter for the first time in four years — but the government data does not reflect the impact of the coronavirus COVID-19 pandemic.

The Labor Force Survey published by the General Authority of Statistics (GASTAT), which was conducted in January 2020, before the pandemic, showed that the total unemployment rate amounted to 5.7 percent in the first quarter, unchanged compared to the first quarter of the previous year.

Regional economies have been hit by the double whammy of the coronavirus and weak oil prices which has forced major employers to lay off staff throughout the Gulf and led to the departure of thousands of expatriate workers.

Last week the International Labor Organization warned the outlook for the global jobs market in the second half of 2020 was “highly uncertain” and that employment was unlikely to return to pre-pandemic levels this year. 

“The estimates have revised upwards considerably the damage done to our labor markets by the pandemic,” said Guy Ryder, ILO director-general.

The Saudi unemployment rate decreased to 11.8 percent in the first quarter of 2020, from 12.5 percent the same period in 2019, and compared to 12 percent in the last quarter of 2019. 

The figures also reflect an increase in the total labor force participation rate to 58.2 percent in the first three months of 2020, a jump of 1.8 percentage points compared to the same period in 2019.

GASTAT said that the stability in the unemployment rate and the increase of labor force participation rate were due to the increase in the number of employees in the survey.

That trend was driven by a decrease in the Saudi female unemployment rate that stood at 28.2 percent in the first quarter of 2020, 2.7 percentage points lower than the last quarter in 2019. 

Meanwhile the Saudi male unemployment rate rose to 5.6 percent, 0.6 percentage points higher than the rate of last quarter in 2019.

The statistics show that there are almost 9.98 million people in employment across the public and private sectors.

About 3.2 million of them are Saudis. The figures exclude workers in the security and military sectors. 

The data also reveal that there are 3.66 million domestic workers in the country, all of them non-Saudis.

The labor market statistics are compiled from two main sources. The first is the labor force survey, which is a household survey that is carried out by GASTAT and provides the most important indicators of the labor market, such as the unemployment and labor force participation rates.

The second source is administrative data which is recorded and updated by government agencies related to the labor market.