Unemployment falls to lowest for seven years
Thursday 15 May 1997
But the Government, which in opposition criticised the jobless figures as "fiddled", welcomed an announcement by the Office for National Statistics yesterday that it would review them. The recent sharp falls in the headline total have been exaggerated by the introduction of the Job Seekers' Allowance last October.
Other figures yesterday suggested wage pressures were not quite as severe as many economists feared. The rate of underlying average earnings growth was 4.5 per cent in March, the same as February's rate which was revised down by half a percentage point.
The Bank of England indicated, on the publication of its Inflation Report earlier this week, that 4.5 per cent pay growth was barely compatible with hitting the inflation target in the longer term.
Economists agreed that yesterday's figures indicated the labour market was getting tighter, but differed in their assessment of the inflationary dangers.
James Barty, of Deutsche Morgan Grenfell, said: "With unemployment continuing its rapid decline and the surveys beginning to show labour shortages, there is good reason to be concerned about the outlook for earnings." But John O'Sullivan at NatWest Markets said pay inflation was unlikely to rise above the 4.5 per cent threshold.
Earnings, like other economic statistics, reflect the diverging fortunes of manufacturing and services. The underlying growth rate in manufacturing has edged up from 4.5 per cent in March 1996 to 4.75 per cent, but the figure in services has climbed from 3.5 per cent to 4.75 per cent.
Bonuses in sectors such as financial services have been 30 per cent higher this year than last.
Claimant unemployment fell for both sexes, all ages, all regions and at all durations last month. The number of the unemployed aged under 25 fell to 421,700, their lowest proportion of the total on record.
Just over one-third of the total, 616,500, have been unemployed for more than a year.
The Employment Minister Andrew Smith said: "Unemployment is falling, but there are still far too many people without jobs and skills. We cannot accept unemployment at these levels."
The Office for National Statistics said it was reviewing the unemployment statistics in the light of increasing interest in alternative measures. Last year ministers decided against introducing a monthly survey of unemployment because of the pounds 8m-pounds 10m cost.
The ONS will consult widely over whether it should in fact be introduced, or whether to opt for a monthly figure derived from the existing quarterly survey, at a cost of about pounds 250,000. Many experts would prefer the dearer alternative.
Ruth Lea of the Institute of Directors said: "How important are the unemployment figures as a measure of the economy? If they are important, there is a good case for putting more money into them."
Separate figures in yesterday's batch showed that employment in manufacturing dipped by 3,000 in March. The level has been broadly flat for about 15 months.
The number of vacancies at JobCentres increased slightly to a new record of 275,600. The ratio of vacancies to unemployment, a favoured measure of tightness in the jobs market, is well above its 1989 peak.
Economics column, page 26
Are beards attractive? Ryan Gosling says yes, but science says no. Take the A-list facial hair challenge and find out who's right
South Korea ferry: Four dead and almost 300 missing as mass rescue gets underway
Oscar Pistorius trial: Reeva Steenkamp told athlete she 'loved him' for first time in Valentine's Day card
Oscar Pistorius trial: Reeva Steenkamp standing with 'hand on the door handle' when she was shot dead
Lunar eclipse 2014: Images of the spectacular 'blood moon'
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
US Navy christens huge $3 billion destroyer ship USS Zumwalt that appears as a fishing boat on enemy radar
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
Nigel Farage on Have I Got News For You: Ukip leader ridiculed over expenses and party 'fruitcakes'
Refugee facing deportation from Sweden saved by fellow passengers refusing to let plane leave
- 1 Poveglia: 'World's most haunted island' up for auction...is anyone brave enough to buy it?
- 2 Refugee facing deportation from Sweden saved by fellow passengers refusing to let plane leave
- 3 Naked yoga: the bare truth - it's already big in the US, and has now landed here
- 4 24 people applied for the 'world's toughest job', here are their interviews
- 5 Scientists warn we've hit 'peak beard': The more people grow facial hair, the less attractive it is
iJobs Money & Business
£40000 - £50000 per annum + BONUS + BENEFITS: Harrington Starr: A leading, Cit...
£35000 - £50000 per annum + Bonus + Benefits: Pro-Recruitment Group: You must ...
£45000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: Corporate Acti...
£350 - £400 per day: Harrington Starr: An opportunity has arisen at a FCA regu...