Employment figures overshadowed by low wage increases as inflation rises

The Chancellor of the Exchequer used his budget speech (March 20) to give the Bank of England a more flexible task in controlling inflation.  However, following the release of the March employment figures shortly before he spoke, it is the difference between the rise in wages and the current inflation rate that has dominated many economists’ commentaries.

Average weekly earnings (not counting bonuses) went up 1.2 per cent in the three months to the end of January.  The figure issued in February showed a 1.3 per cent increase and in January a 1.4 per cent increase.  

Meanwhile inflation (the Consumer Price Index) has reached 2.8 per cent – the highest figure for nine months.  This cut in the real value of people’s wages will further dampen High Street demand and mean a lower than expected rise in the government’s tax receipts.

And some experts expect inflation to break through the three per cent mark in the summer.

The employment figures themselves provide mixed messages: employment has gone up by 131,000 between November 2012 and January 2013, but unemployment is up by 7,000 to 2,520,000 people aged sixteen and over.  Of those 1.1 million are women and 1.4 million are men.
There was a small drop of 1,500 in the number of people claiming job seekers’ allowance with the total number of claimants now one million below the total of those unemployed. This is because many unemployed people are not eligible for the allowance and job centres are now under pressure to apply the guidelines more strictly.

The February figures for the Devizes constituency (issued March 20) show little change. The total number of JSA claimants in February has gone up – by seven people.  

The figure for those between eighteen and twenty-four claiming JSA is up by twenty. This reflects the national increase of 48,000 to 993,000 – but that figure is 45,000 fewer than for the same month last year.

And the number of workers in the Devizes constituency who have been claiming JSA for more than a year is more than twice what it was a year ago – sticking around the 200 mark.