“It’s positive to see the labour market continuing to expand, with more people in work pushing the employment rate even higher and unemployment falling to 4.2 per cent. While regular pay growth has reduced a little, comparing the figures to those in the same period last year, real pay continues to grow at much the same rate as before, as inflation has also edged down.
“However, there are signs of underlying weakness. Employment growth has become much more dependent on part time work, so total hours worked have fallen. Female part-time employment makes up more than a third of the annual increase in employment, which may suggest that employers are being forced to offer more flexible hours to attract more applicants against the backdrop of a tightening labour market and falling net migration.
“Overall, the labour market is expanding more slowly than in the past, and the hours worked measure has contracted slightly. As things stand, this looks more like a short term hiatus than the start of a more sustained decline.
“There is no sign that falling unemployment is feeding into higher wage growth, backing the Bank of England’s judgement that there is no immediate need for an interest rate rise.”
