By Marcus Leach
Graeme Leach, Chief Economist at the Institute of Directors, has welcomed the news that the number of people out of work fell by 37,000 between September and November.
The Office for National Statistics' (ONS) data shows that the number of people out of work is now down to 2.49 million. The total is the lowest since the March-to-May period in 2011.
The ONS also said that the number of people claiming Jobseeker's Allowance fell by 12,000 to 1.56 million in December, the lowest figure since June 2011.
“The rise in employment to its highest level since records began is obviously very good news, but it also begs the question as to how many more jobs the private sector could create if it was freed from onerous employment law?" Leach said.
"If we want to see faster GDP growth in the UK the Government has to become more aggressive, with radical labour market reforms. Of course, much of the regulatory burden stems from the EU, and will be at the centre of any future renegotiation in our membership.
“Total employment income is helped by the growth in employment, but it is also constrained by the very weak growth in earnings at 1.4%. So don’t expect this trend to be reflected in Friday’s GDP figures.”
However, Mark Beatson, Chief Economist at the Chartered Institute of Personnel and Development (CIPD), raised concerns about the youth unemployment rate.
“The latest statistics show that the UK labour market continued to perform strongly last autumn. Unemployment has fallen back below 2.5 million on the back of continued strong jobs growth, specifically in full-time positions," he said.
"Employers’ continued willingness to recruit and retain staff in the face of uncertain demand conditions will in part be due to continued pay moderation in both the public and private sector. This has helped maintain competitiveness even during a period of weak productivity growth, as evident in the latest figures for unit labour costs, which fell in the third quarter of 2012.
“However, a continuing source of concern is the labour market position of young people. Compared to last month’s figures, the number of unemployed 18-24 year olds has increased whereas unemployment in age groups 25-64 has fallen. If this trend continues we risk a permanent scar on the labour market.
"It is in employers’ interests to build their future skills base by recruiting the next generation of workers. But it is also important that young people receive the right careers advice and support necessary to enable them to benefit from employment growth.”
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