Unemployment is down, but so are real wages

Mixed news in the ONS release.

Unemployment is down to 7.8 per cent from 7.9 per cent three months ago, according to the ONS:

Unemployment rate (aged 16+), seasonally adjusted

  • The employment rate for those aged from 16 to 64 for October to December 2012 was 71.5%, up 0.3 percentage points from July to September 2012. There were 29.73 million people in employment aged 16 and over, up 154,000 from July to September 2012.
  • The unemployment rate for October to December 2012 was 7.8% of the economically active population, down 0.1 percentage points from July to September 2012. There were 2.50 million unemployed people, down 14,000 from July to September 2012.
  • The inactivity rate for those aged from 16 to 64 for October to December 2012 was 22.3%, down 0.2 percentage points from July to September 2012. There were 8.98 million economically inactive people aged from 16 to 64, down 94,000 from July to September 2012.
  • Between October to December 2011 and October to December 2012, total pay (including bonuses) rose by 1.4% and regular pay (excluding bonuses) rose by 1.3%.

The rise in total employment takes it to a new record high, for the 140th time. It shouldn't be taken too seriously, because most of the increase is simple population growth, but you can be certain that that is a statistic which will be rolled out again soon.

Similarly, the release shows a further 65,000 private sector jobs in June 2012, meaning that you will continue to hear the soundbite "one million private sector jobs since the election". That too is not strictly true; as George points out, that million includes 196,000 jobs "reclassified" from the public sector. Take those out, and we still aren't at a million new jobs, even with the latest increase.

The earnings rise, of 1.4 per cent between October and December 2011 and the same period in 2012, is lower than it had been year-on-year last month, and remains stubbornly below inflation. The ONS confirms that "prices therefore increased by more than earnings", as they have done consistently since the recession. The gap is growing, too, as inflation looks likely to stay around 3 per cent despite falling wages.

One unambiguously good datapoint is that the trend to underemployment seems to be reversing. With 167,000 new full time jobs, the number of people working part time who don't want to be is falling, although the number of people working temporarily who don't want to rose by another percentage point on the quarter.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Who will win in Manchester Gorton?

Will Labour lose in Manchester Gorton?

The death of Gerald Kaufman will trigger a by-election in his Manchester Gorton seat, which has been Labour-held since 1935.

Coming so soon after the disappointing results in Copeland – where the seat was lost to the Tories – and Stoke – where the party lost vote share – some overly excitable commentators are talking up the possibility of an upset in the Manchester seat.

But Gorton is very different to Stoke-on-Trent and to Copeland. The Labour lead is 56 points, compared to 16.5 points in Stoke-on-Trent and 6.5 points in Copeland. (As I’ve written before and will doubtless write again, it’s much more instructive to talk about vote share rather than vote numbers in British elections. Most of the country tends to vote in the same way even if they vote at different volumes.)

That 47 per cent of the seat's residents come from a non-white background and that the Labour party holds every council seat in the constituency only adds to the party's strong position here. 

But that doesn’t mean that there is no interest to be had in the contest at all. That the seat voted heavily to remain in the European Union – around 65 per cent according to Chris Hanretty’s estimates – will provide a glimmer of hope to the Liberal Democrats that they can finish a strong second, as they did consistently from 1992 to 2010, before slumping to fifth in 2015.

How they do in second place will inform how jittery Labour MPs with smaller majorities and a history of Liberal Democrat activity are about Labour’s embrace of Brexit.

They also have a narrow chance of becoming competitive should Labour’s selection turn acrimonious. The seat has been in special measures since 2004, which means the selection will be run by the party’s national executive committee, though several local candidates are tipped to run, with Afzal Khan,  a local MEP, and Julie Reid, a local councillor, both expected to run for the vacant seats.

It’s highly unlikely but if the selection occurs in a way that irritates the local party or provokes serious local in-fighting, you can just about see how the Liberal Democrats give everyone a surprise. But it’s about as likely as the United States men landing on Mars any time soon – plausible, but far-fetched. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.