Latest Jobs Data Suggests No ‘Brexit Effect’
Economists have said the slight fall in UK unemployment to 1.63 million between May and July shows there is yet to be a “Brexit effect” on the jobs market.
The unemployment rate was 4.9%, down from 5.5% a year ago and little changed from last month’s rate, Office for National Statistics data shows
Nearly three quarters of people who can work have jobs, a record high rate.
Employment was “resilient” before and after the EU vote, despite predictions of an economic shock, analysts said.
Kallum Pickering, an economist at Berenberg, said: “Although it is still early days, the UK labour market is yet to show any Brexit effect for the period immediately before and after the June 23 vote.”
His analysis of the ONS data showed that unemployment fell to 4.7% in July, the first month since the vote.
Ben Brettell, senior economist at Hargreaves Lansdown, said: “The UK’s labour market proved resilient in the immediate aftermath of the vote to leave the EU, ONS data has shown.
“This is the latest piece of evidence which shows the economy has fared better than expected since June’s referendum.”
John Hawksworth, chief economist at PwC, agreed the jobs data showed “no immediate impact from the Brexit vote”.
Beneath the surface
The ONS said the figures, which only cover one month since the result of the EU referendum, show “continuing improvement” in the jobs market.
But Samuel Tombs, chief UK economist at Pantheon Macroeconomics, warned: “When you scratch beneath the surface, today’s labour market figures are not as robust as they first appear.”
The rise in people in work “remains supported by surging self-employment”, Mr Tombs said.
“The strong growth also reflected a shift towards part-time working; total weekly hours rose by just 0.3% between April and July,” he added.
Growth in average weekly earnings including bonuses also slowed slightly to an increase of 2.3% on last year. That is still ahead of inflation, which was 0.6% in the year to August.
In signs of a possible slowdown in employment, the claimant count, including Jobseeker’s Allowance, went up from the previous month by 2,400 to 771,000.
It comes after a survey this week found employers in six out of nine sectors are less optimistic about adding jobs in the wake of the Brexit vote.
The claimant count is treated with some caution, though, by economists as the move to Universal Credit has made it much harder to calculate.