Amidst the gloom of the media’s economic coverage, little has been made of what looks to be a very positive development in the labour market, namely strong employment growth. It’s a pity that commentators have spent such little time focussing on this trend, because if you asked the man on the street whether he’d rather have GDP or jobs growth, you’d get a universal vote for the latter.
Looking at the figures, employment has been growing steadily over the past two years, and now stands at 29.4million, despite stalled economic growth. This is half a million higher than when the Coalition came to power, and only 200,000 beneath the all-time high achieved at the end of the boom in early 2008. We should be wary of making extrapolations given the propensity for economic data to surprise, but if we do, we would surpass the 2008 peak at the end of this year.
In fact, the 500,000 new job figure masks an even stronger underlying trend. The economy has lost about 400,000 public sector jobs since the UK started bringing its public finances back under control, meaning that the level of private sector job creation has been close to one million during these two years. So despite high oil prices and the Eurozone crisis, the British labour market has performed very well.