Surprise Fall In UK Jobless Rate; Employment At Record High

Surprise Fall In UK Jobless Rate; Employment At Record High


Jobless rate in the U.K. declined unexpectedly in the three months through August, to the lowest level in more than a year as the labor market absorbed record number of workers during the Olympics, data from the Office for National Statistics revealed Wednesday. The unemployment rate, under the definition of the International labor Organization, declined to 7.9 percent in the June-August period from 8.1 percent during March-May.
This was the lowest level since March-May 2011, when the rate was 7.8 percent. Economists had expected the rate to remain unchanged at 8.1 percent.
The number of unemployed declined by 50,000 from the three months through May to 2.53 million, the statistical office said.
"This is another set of impressively resilient and healthy labour market data which gives a lift to recovery hopes," IHS Global Insight's Chief UK and European Economist Howard Archer said. "Ongoing decent employment increases is supportive to consumer spending."
The number of people in employment rose to a record 29.59 million in the three-month period ended August. This figure was up by 212,000 on March-May and increased by 510,000 on a year earlier.
Full-time employment rose by 88,000 to 21.462 million, while part-time jobs were up by 125,000 to 8.129 million. "This may well have been helped by the Olympics," Archer noted.
ONS said the jobless claims fell by 4,000 from a month earlier to 1.57 million in September. The claimant count has now declined for three consecutive months.
Expectations were for no change in the number of people claiming the job seeker's allowance. The claimant count rate remained unchanged at 4.8 percent as expected.
The average earnings, including bonuses, rose 1.7 percent year-on-year during the June to August period. This was forecast to rise 1.6 percent. Regular pay, excluding bonuses, rose 2 percent on a year earlier.
However, Archer said though the economy may manage to eke out modest growth over the coming months, it remains doubtful if that will be strong enough to prevent unemployment heading gradually higher.
Unless the economy starts showing sustained decent underlying improvement, pressure will increase on firms to release some of the workers that they have been holding on to, the economist added.
The economy remained in double-dip recession in the second quarter with the gross domestic product shrinking 0.4 percent sequentially after a 0.3 percent dip in the first quarter and 0.4 percent fall in the fourth quarter of 2011.