Heart-warming statistics were announced yesterday when the UK unemployment figures showed a repeated downward slide.This means that unemployment is at a two year low with 7.7% of the UK workforce now not in a steady job.
The unfortunate flip side to this good news is that pay packets are stagnating while the cost of living rises and therefore is showing a below inflation cash power reality.
This squeeze on employee wages gives real concern to economists who understand less available income, means less spending on the High Street and that ever-shrinking economy not getting the boost it so desperately needs.
Steadily falling unemployment for almost a year and a half, the trend is an unexpected surprise but confusing economists, who see a decline in exportation and GDP forecasting. Comments from business leaders have offered possible reasons behind the data as being regional disparities, discrepancies in economic figures, opting for part-time employment rather than full-time positions or switching to self-employment.
Philip Shaw from Investec said “The employment numbers continue to flatter to deceive. The trends in both unemployment and jobs creation are completely at odds with the weakness with much of the real economy data that are being published.
“Whilst questions will be asked about the so-called productivity puzzle, the bottom line is that a robustly performing labour market is good for confidence and good for the public finances.”