‘Strong and clear growth’ pushes OECD employment to record high

EMPLOYMENT across the rich world hit a new record high at the start of 2017 with the widespread economic recovery pushing up demand for workers.

A total of 557m people were in work across the 35 countries in the Organisation for Economic Co-operation and Development (OECD), at an employment rate of 67.4pc.

That is the highest number in the study’s 12-year history and compares with a financial crisis-era low of 64.4pc at the end of 2009. It is also above the pre-crisis high of 66.6pc in early 2008.

The rise in employment is not evenly spread across the 35 member economies. Employment in the UK hit 73.9pc in the first quarter and has risen further since then, up from 71.3pc a decade ago.

By contrast the rate in the US, at 68.9pc, is down substantially from 72pc in 2007. The lowest rate is Turkey’s 50.9pc, followed by Greece’s 52.7pc. At the other end of the scale, 86.9pc of all 15 to 64-year olds in Iceland are employed, followed by 79.4pc in Switzerland.

The participation rate, a measure that includes those who are unemployed, as well as those in work but not those who are not seeking a job, shows a similar picture.

It too stands at a record high of 71.8pc, higher than any of the annual numbers in the OECD’S database, which goes back to 1964.

The British participation rate is again well above the average at 77.5pc. The US’S rate has edged up in recent years to 73.2pc, though that remains below the rate seen for much of the past 30 years in the country.

Rising employment and labour market participation is a positive sign for the economy, though economists remain puzzled that the improvement has not led to a substantial rise in wages and an uptick in inflation.

In the UK, wages are rising more slowly than prices despite unemployment falling to 4.5pc, its lowest level since the Seventies.

Average weekly wages increased by just 1.8pc in the year to May, while prices went up by 2.9pc over the same period – meaning workers are getting worse off in real terms.

“If our second-quarter forecasts are right, the global economy has just completed a year of 3.2pc GDP growth, equalling its best performance over the past six years,” said Bruce Kasman, an economist at JP Morgan.

But while the world is experiencing “strong and clear growth” it is also facing “low and puzzling inflation”, he said.