By Marcus Leach
Graeme Leach, Chief Economist at the Institute of Directors, believes that the latest unemployment figures don't reveal too much about the true state of the economy.
The latest official figures show that UK unemployment has fallen by an unexpected 5,000. The Office for National Statistics's (ONS) data suggests 2.51 million people were out of work in the three months to April.
“The labour market figures don’t really tell us a lot," Leach said.
"The fall in unemployment on both the claimant count and ILO measures is very small, as is the gain in employment from private sector jobs growth exceeding the decline in the public sector. We remain cautiously optimistic about the economic outlook in 2013 and still believe GDP growth could be around 1.5% this year.
“Perhaps the clearest sign comes from the continued pressure on household incomes, with inflation running well ahead of earnings growth, which is just 1.3% (excluding bonuses). The real income squeeze remains a dragging anchor on GDP growth.”
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