Today’s labour market figures have enough in them for both sides of the political debate to feel they’ve got something to run with. First, the jobs: the overall unemployment rate fell to 6.4% in the second quarter of this year, the lowest since the end of 2008. There are 820,000 more people in work than a year ago. The number of young people out of work is 200,000 lower than last year, which is the biggest fall since records began 30 years ago. And the Bank of England has just upgraded its growth forecast for the UK this year from 3.4% to 3.5% and from 2.9% to 3% for next year. Good news for the Coalition.
But the Labourish piece of bad news is that real wages are shrinking. Today’s figures reveal that average weekly earnings excluding bonuses fell 0.2 per cent to £450 per week before tax in the three months to June. This is the first fall since 2009.The ONS explains that this was ‘mainly due to an unusually high growth rate for April 2013 as some employers who usually paid bonuses in March paid them in April last year’. Pay was 0.5 per cent higher for April to June 2014 than a year earlier, which is the lowest annual growth rate since records began in 2001.
The Tories will argue that more people in jobs is good news that Labour cannot disagree with. They’ll say it confounds Ed Balls’ gloomy predictions. Labour will say the Tories are out of touch and don’t appreciate the pressure on household finances. It’s enough for both of them to go on.