The headline figure suggests that unemployment in the UK has fallen by 37000 during the three-month period to September, creating a fresh 11-year low. Unemployment now stands at 4.8% according to the Office for National Statistics (ONS). This figure is “close” to what is termed “full employment” a concept where the number of people out of work has trended down to its “natural rate” where those seeking a job can find it easily. The devil, as always, is in the detail.
Much was made in the UK referendum about the idea that “(EU)immigrants” were taking the jobs of British workers and undercutting native salaries, but the fact that UK employment is close to full tends to make a nonsense of this contention. Various trade union and economic bodies have said that there is no concrete evidence that supports the view that immigrant workers drive down wages, but as the election of Trump shows, facts and the truth are no longer as central as they once were in forming public opinion.
According to the ONS, the unemployment figure, of 1.6 million, is based on surveys and is a best estimate derived from the data within a confidence interval of 95%. The interval equates to 75000 jobs, so it is statistically questionable to claim that unemployment has actually fallen (since the uncertainty intervals for the current and previous unemployment figures overlap), but you might argue that a downwards trend is evident.
David Freeman of ONS commented: "Unemployment is at its lowest for more than 10 years and the employment rate remains at a record high. Nonetheless, there are signs that the labour market might be cooling, with employment growth slowing."
The British Chamber of Commerce opined that Brexit was "dampening firms' recruitment intentions". Commenting on the most recent data, Suren Thiru, BCC’s head of economics noted: "These subdued labour market and economic conditions are also expected to keep a lid on wage growth over the next year, despite higher than expected levels of inflation".
From an economic perspective, businesses that trade significantly with the EU from a British base are likely to put job expansion plans on hold until the details behind “Brexit means Brexit” are clearer.