Figures released today by the Office for National Stats ONS reveal that the number of people in work throughout the UK has continued to grow, while the official unemployment rate has also dropped marginally. The stats for March showed that, in the first three months of 2014, a further 283,000 people found new jobs than in the previous quarter.

Compared to March 2013, an additional 722,000 people entered the job market. According to the ONS, a significant proportion of those people declared themselves to be self-employed, showing that straightforward job opportunities might not be as plentiful as the figures may suggest. Nevertheless, the job market’s forward momentum is being maintained, but all isn’t what it seems.

Grinding to a halt?

Compared to the previous three-month period ending in December, the unemployment rate fell marginally to 6.8%, which although far improved when going against the 7.2% from the quarter beforehand, didn’t quite tell the whole story. Commenting on this, Joshua Raymond, Chief Market Strategist, said this:

“The UK unemployment rate fell to 6.8% from 6.9% in March, in line with analyst forecasts and hitting the lowest level for five years. Quarterly employment enjoyed the biggest rise since records began in 1971.

“However, it wasn’t all positive, with UK average earnings over three months dramatically missing forecasts for a big jump to 2.1% and remaining flat at 1.7%, below that of inflation. This is a big miss and damages a degree of the positivity about the ability of the consumer to help add an extra tier to the UK’s impressive economic recovery.

“As a result of the miss on UK earnings, we saw traders sell the Pound Sterling against the Dollar, predicting that the Bank of England could be forced to push out the timing of the UK’s first rate hike a little further than expected if weaker than expected earnings becomes a trend” added Mr Raymond.

Moving forward

The biggest challenge facing the labour market in the short to medium-term is wage growth. Although this is starting to improve, keeping pace with inflation is still some way off. Should wage growth with or without bonuses start to move forward, correlating with a slight decline in the inflation rate, then it can be said that the labour market as a whole is resurgent.

Another issue which may need to be addressed sooner rather than later is the relative lack of permanent, full-time vacancies being created by the market. Although a rise in entrepreneurship can be positive, self-employment is one of the few options still open for many frustrated jobseekers. Creating more jobs will certainly help to address this imbalance in the employment stats.