UK wage growth stalls despite record employment
The Office for National Statistics said the growing number of vacancies, together with the falling level of unemployment, indicated the jobs market was continuing to tighten. The jobless rate fell from 3.9% to a record 3.8%, the lowest since 1974.
However, analysts said this trend had not driven employers to increase wages to levels seen before the financial crisis.
Mike Jakeman, a senior economist at PwC, said: “It is possible to see the shadow of Brexit in some of these figures. March was the month when Brexit anxiety was at its most acute, and it might have been the case that firms were more reticent to offer higher wages and advertise new positions in these weeks.”
After several months of rising wage growth, the recent slowdown could further strain household budgets amid Bank of England forecasts of an increase in shop prices this year.
Inflation has steadied in recent months at 1.8%, but is expected to rise above the central bank’s target of 2%. The ONS put the inflation-adjusted rate of wage growth at 1.3%
Brexit-related uncertainty was blamed for a rise in self-employment, which returned to its record high of 15.1% of all jobs, last seen in 2017.
The unemployment rate for men fell by 0.2 percentage points to 3.9% while the rate for women dropped by 0.1 percentage points to reach a new low of 3.7%.
Much of the tumbling rate of female unemployment is down to tougher welfare rules that push women with young children back into the labour market. Pension rule changes that force women nearing retirement to work longer have also had an impact.
This trend is also borne out in the number of people who were economically inactive, which fell by 23,000 to 8.61 million and cut the inactivity rate by 0.1 percentage points to 20.8%.
Vacancies have fallen back in recent months from a record high, but they remain elevated at 850,000 across all sectors.
The sectors with vacancies greater than 60,000 were:
Wholesale and retail trade, repair of motor vehicles and motor cycles (139,000).
Human health and social work activities (134,000).
Accommodation and food ( 92,000).
Professional, scientific and technical activities (80,000).
The employment minister, Alok Sharma, said: “Maintaining our record employment rate with unemployment falling again to just 3.8%, its lowest rate since 1974, once again shows the success of our balanced approach to managing the economy.
“Rising wages and booming higher-skilled employment means better prospects for thousands of families, and with youth unemployment halving since 2010, we are creating opportunities for all generations.”