Unemployment up as spending squeeze tightens

Unemployment Up As Spending Squeeze Tightens


There's more bad news for consumers as official figures
suggest wage growth is slipping further behind prices rises.


9:50am UK,
Wednesday 15 May 2013

The gap between low earnings growth and inflation has
grown

The UK
consumer prices index (CPI) and retail prices index (RPI)
inflation rates -
in percentage terms - from January 2012
onwards.

CPI rateRPI rateBoE target

Feb

Mar

Apr

May

Jun

Jul

Aug

Sept

Oct

Nov

Dec

Jan '13

Feb

Mar

0

1

2

3

4

5

FusionCharts

ONS

Graph: Charting The UK Inflation
Rates
Enlarge

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The latest employment figures show average earnings growth at its
lowest level on record - intensifying the squeeze on household budgets.

The Office for National Statistics (ONS) said that wage growth, excluding
bonuses, was measured at just 0.8% in March - a month where the CPI measure of
inflation stood at 2.8%.

Analysts suggest the dip in wage growth is the price the labour market is
paying for higher employment.

When bonuses were included, annual wage growth for the three months to March
was 0.4%, a fall of 0.4% on the previous quarter.

Unemployment over the same period grew by 15,000 to 2.51 million though the
jobless rate eased to 7.8%.

However, the number of people claiming unemployment benefit fell more than
expected - by 7,300 in April.

The figures also revealed that 902,000 people had been out of work for more
than a year, a 23,000 increase on the three months to December.

The number of unemployed 16 to 24-year-olds fell by 17,000 to 958,000 while
those classed as economically inactive, including students, people on long-term
sick leave and people who have given up looking for work, rose by 47,000 to nine
million.

Despite today's increase in unemployment, the total is 92,000 lower than a
year ago.

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