Source: UK Office for National Statistics

UK unemployment fell to the lowest in more than a year and a half in May, a signal that the pace of economic growth is keeping up inflation pressures in the labour market. However, UK headline average earnings growth unexpectedly slowed in April to its weakest since December as high New Year bonuses dropped fell out of the three month calculation.

The trend in the employment rate is falling while the trend in the unemployment rate is close to flat. There has been a further fall in the number of people claiming Jobseeker's Allowance benefit. The trend in the inactivity rate is increasing. The number of job vacancies has increased. Growth in average earnings excluding bonuses is unchanged but growth in average earnings including bonuses has fallen.

The employment rate for people of working age was 74.3 per cent for the three months ending in April 2007, down 0.1 from the previous quarter and down 0.3 over the year.

The number of people in employment for the three months ending in April 2007 was 29.01 million, down 10,000 over the quarter but up 87,000 over the year. Total hours worked per week were 925.9 million, down 3.7 million over the quarter but up 1.7 million over the year.

The number of jobs in March 2007 was 31.59 million, down 22,000 over the quarter but up 265,000 over the year.

The unemployment rate was 5.5 per cent, unchanged over the quarter but up 0.2 over the year. The number of unemployed people fell by 15,000 over the quarter but increased by 58,000 over the year, to reach 1.68 million. This quarterly fall in unemployment occurred entirely among women.

The claimant count was 880,400 in May 2007, down 9,300 over the previous month and down 71,500 over the year. The claimant count has now fallen for ten out of the last eleven months.

The inactivity rate for people of working age was 21.3 per cent for the three months ending in April 2007, up 0.2 both over the quarter and over the year. The number of economically inactive people of working age increased by 77,000 over the quarter to reach 7.95 million, the highest figure since comparable records began in 1971. This quarterly increase in inactivity was largely due to more economically inactive students and more people looking after the family and home.

The annual rate of growth in average earnings (the AEI) excluding bonuses was 3.6 per cent in April 2007, unchanged from the previous month. Including bonuses it was 4.0 per cent, down 0.4 from the previous month.

There were 638,800 job vacancies for the three months to May 2007, up 21,700 over the previous quarter and up 54,400 over the year. The quarterly increase in vacancies mainly occurred in the service sectors.

The redundancy rate for the three months to April 2007 was 5.2 per 1,000 employees, down 0.3 over the quarter.

Source: UK Office for National Statistics

Average Earnings

Average earnings in the UK, including bonuses rose by 4.0 per cent in the year to April, down from 4.4 per cent in March. The fall in the including bonuses rate is due to lower growth in the private sector services sector, following two months of stronger growth in February and March which had been driven by higher bonuses in the financial intermediation sector. Average earnings excluding bonuses, or regular pay, rose by 3.6 per cent in the year to April 2007, unchanged from March.

In the year to April pay growth (including bonuses) in the private sector was 4.2 per cent, compared with 3.1 per cent for the public sector. Excluding bonus payments, private sector growth stood at 3.7 per cent compared with 3.1 per cent for the public sector.