UK Employment Reaches Highest Levels in December

The monthly labor market report from the UK showed that the number of people who were working in the UK rose to a record high of 32.6 million in the three months ending December 2018.

The unemployment levels remained little changed, with the number of people unemployed coming in at 1.36 million. The unemployment rate remained steady at 4.0% for the second consecutive period. This marked the lowest unemployment rate since record-keeping began in 1975.

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Average Earnings

Data from the UK’s Office for National Statistics showed that the average earnings rose 3.4% in the year to December. This was after adjustment for inflation. The number was the highest level on record since December 2011.

Meanwhile, the number of people who were in work during the reported period rose by 167,000 from the previous quarter. This was higher by at least 444,000 compared to the same period from the year before.

The employment rate which measures the proportion of the number of people who are working was seen rising from 75.2% to 75.8%. This was higher than the year before, and it was also the highest level since 1971.

The UK Economy

The solid report on jobs comes amid the Brexit uncertainty. Government officials were quick to capitalize on the strong report. They noted that the latest jobs report reflects the resilience in the UK economy despite falling global trade and a decline in activity in sectors such as manufacturing.

Head of the Labor market report Matt Hughes from the ONS, stated that the jobs market remained robust. He noted that the employment rate edged higher while the unemployment rate stayed steady near record lows.

However, some analysts remain doubtful of how far the UK’s labor market will continue to expand. Citing recent forward-looking indicators such as business surveys, some remain doubtful that the UK economy will be able to maintain the momentum in the coming months.

But despite the pessimistic outlook, there is a broad agreement that wages are unlikely to fall and could stay anchored above the 3% threshold. Wages grew 3.4% which was slightly below estimates of a 3.5% increase.

However, the next jobs report could be of importance. It could show whether or not the slowdown signaled from the forward-looking indicators has indeed impacted the labor market.

Inflation

Recent economic data included the release of the inflation figures. Consumer prices have begun to ease at a steady pace, and in January, it was seen falling below the BoE’s target of 2.0%. However, officials maintain that inflation could remain anchored above the BoE’s inflation target rate later in the year.

The central bank has maintained interest rates at 0.50% and signaled its willingness to hike rates after the Brexit uncertainty passes.

Data showed that activity in the UK slipped in January. This could start to affect the data coming in the next month. Despite this, the labor market remains a strong point in the UK’s economy weathering the Brexit uncertainty.

Brexit

The UK is yet to agree to a deal with the EU. The previous agreements were rejected by the UK parliament and PM May is expected to resume talks with the EU officials. However, the EU remains unwilling to give any further concessions.

The EU Commission president, Jean-Claude Junker told reporters last week that if the UK wanted an extension, the EU would be willing to extend the Brexit deadline until May. The new deadline will follow the scheduledEU parliament elections.