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No 'Brexit effect' in latest jobs data | |
(about 1 hour later) | |
Economists have said the modest 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 (ONS) data shows. | |
The proportion of people in work hit a record high of 74.5%. | The proportion of people in work hit a record high of 74.5%. |
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. | 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." | 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 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. | "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. | The claimant count is treated with some caution, though, by economists as the move to Universal Credit has made it much harder to calculate. |
Analysis: BBC economics editor Kamal Ahmed | Analysis: BBC economics editor Kamal Ahmed |
One interesting nugget in the employment figures concerns the number of people employed in the public sector. | One interesting nugget in the employment figures concerns the number of people employed in the public sector. |
It is down to 5.33 million, the lowest level since the Office for National Statistics started collecting the figures in 1999 and a drop of 13,000 since March. | It is down to 5.33 million, the lowest level since the Office for National Statistics started collecting the figures in 1999 and a drop of 13,000 since March. |
The former chancellor, George Osborne, often spoke about the need to "rebalance" the economy. | The former chancellor, George Osborne, often spoke about the need to "rebalance" the economy. |
To an extent, he meant away from financial services and towards manufacturing. | To an extent, he meant away from financial services and towards manufacturing. |
But, more privately, he was actually very comfortable with an economy that was "rebalancing" away from the public sector towards the private sector, where wealth, he would argue, is actually created. | But, more privately, he was actually very comfortable with an economy that was "rebalancing" away from the public sector towards the private sector, where wealth, he would argue, is actually created. |
As cuts and wage freezes bite, the public sector has become less attractive as a place to build a career. | As cuts and wage freezes bite, the public sector has become less attractive as a place to build a career. |
Yes, employment is at record levels, but it is the private sector that is on the up. | Yes, employment is at record levels, but it is the private sector that is on the up. |
The unemployment estimates come from the Labour Force Survey in which the ONS talks to 40,000 households every three months. | The unemployment estimates come from the Labour Force Survey in which the ONS talks to 40,000 households every three months. |
Although it is a very large survey, there is still a margin of error. The ONS says it is 95% confident that the figure of a 39,000 fall in unemployment is correct to within 78,000. | Although it is a very large survey, there is still a margin of error. The ONS says it is 95% confident that the figure of a 39,000 fall in unemployment is correct to within 78,000. |
As the estimated change is smaller than the margin of error, it means the change in unemployment is not statistically significant. | As the estimated change is smaller than the margin of error, it means the change in unemployment is not statistically significant. |