Figures reveal number in work down by 0.5%
THE number of people in work in Wales has fallen with the employment rate among 16 to 64-year-olds down by 0.5% in the three months to the end of May.
The latest figures from the Office for National Statistics (ONS) also show the unemployment rate among those aged 16 and over above the UK average at 4.6%.
Unemployment is higher than at the same point in 2016, though only by 0.1%.
First Minister Carwyn Jones said: “The labour market in Wales remains strong with employment at a near record high level and unemployment down on the last quarter.
“Economic inactivity levels in Wales have also improved over the past 12 months. We continue to punch above our weight when attracting inward investors to Wales.
Last year, despite the Brexit referendum result, Wales still attracted 85 new projects, creating and safeguarding over 11,500 jobs. This is the third highest number of projects recorded for Wales since records began more than 30 years ago.
“Tomorrow I visit Brussels to meet with Michel Barnier to make the case for Wales and highlight the importance of the Single Market for the Welsh economy and jobs. In the 20 months that remain before March 2019, we will do all in our power to safeguard the interests of businesses and workers in Wales.”
Minister for Employment Damian Hinds said: “These latest statistics are another reminder that our strong economy is giving record numbers of people the chance to find and stay in work. There’s good news in Wales, where the unemployment rate fell 0.2 percentage points on the quarter.
“We’re committed to delivering a welfare system which transforms lives and offers help to those who need it most, whatever their background or wherever they are from.”
Taking the UK as a whole, the unemployment rate fell to its lowest level since 1975 at 4.5%.
Unemployment dropped by 64,000 to 1.49 million in the three months to May, the lowest level since 2005.
But the pay squeeze on British households remains with wage growth continuing to fall behind inflation.
The ONS said average earnings eked out the weakest growth since November 2014 at 1.8 % in May, dropping back by 0.3% compared to the month before.
While pay growth excluding bonuses managed a 2% rise over the period, an increase of 0.2% monthon-month, it failed to keep pace with the recent jump in the cost of living.
Inflation marched to its highest level in nearly four years at 2.9% in May, with the Bank of England expecting it to peak at 3% by the autumn.
Matt Hughes, ONS senior statistician, said: “The general picture is little changed on last month, with the overall employment rate and that for women both at record highs, the inactivity rate at a joint record low and the unemployment rate falling to its lowest since early summer 1975.
“Despite the strong jobs picture, however, there has been another real-terms fall in total earnings, with the growth in weekly wages low and inflation still rising.”
Soaring inflation triggered by the Brexit-hit pound has put household spending power under sustained pressure since the start of the year, causing disposable incomes to fall and the amount spent on credit cards to increase.
The rate at which people are setting aside money for savings has also sunk to record lows, suggesting consumers are raiding their nest eggs in order to keep spending.
The ONS said employment climbed to around 32 million, a rise of 324,000 compared with last year and the largest total since records began in 1971.
The employment rate rose by 0.3% on the quarter to a record high of 74.9%.
Those classed as economically inactive fell by 57,000 in the three months to May to 8.83 million, while the number of people on the socalled claimant count increased by 6,000 last month to 829,000.
Howard Archer, EY ITEM Club’s chief economic adviser, said the “anaemic” earnings growth would give Bank of England policymakers a reason to hold back on an interest rate rise.
The employment data came as the Bank’s deputy governor Ben Broadbent said he is “not ready” to raise interest rates due to too many “imponderables” in the economy.
Three out of eight Monetary Policy Committee (MPC) members, Ian McCafferty, Kristin Forbes and Michael Saunders, unexpectedly voted to raise rates to 0.5% earlier this month from their record low of 0.25%, due to concerns over rising inflation.
Helen Barnard, head of analysis at the Joseph Rowntree Foundation (JRF), said: “Britain’s employment has climbed ever higher and it is encouraging to see more people in work.
“Yet the number of people struggling to make ends meet despite being in work has also increased.
“In real terms earnings are no better than they were 12 years ago: total pay in real terms is the same as it was in August 2005.
“With benefits and tax credits frozen, there is little respite for families just about managing.”