Theresa May has no reason to gloat about the latest figures on jobs

Business

It’s quite possible that a Tory toady is in the government whips’ office being briefed on the wording of a question for the prime minister about the latest employment figures as you read this. 

The headline numbers for the three months to the end of April do indeed look good, and with Theresa May now losing ministers over her disastrous handling of Brexit, she could surely use something to smile about.

Beyond those headlines, however, there is plenty for the opposition to get their teeth into. 

Let me explain: economists had predicted that wage growth would remain flat at 2.9 per cent over the period in question. It actually fell to 2.8 per cent.

That’s still ahead of inflation – 2.4 per cent currently with an updated figure due today – so people’s living standards are showing improvement. 

But the rate of it is only very modest and it bears repeating that inflation was up at 3.1 per cent as recently as November. 

That serves to underline the most important takeaway from these figures, one that the PM won’t welcome a reminder of. If wage growth is only barely running ahead of inflation at a time of record employment, labour shortages across various sectors of the economy and low unemployment, what happens if, sorry, when that situation changes? 

It might soon be about to. The official figures tell us only what has happened, not what is going to happen. An indication of that was provided via the publication of the closely watched quarterly ManpowerGroup Employment Outlook Survey, which polls more than 2,000 employers.

This study found that hiring confidence in the UK’s business and financial services sector has sunk into negative territory for the first time in nearly a decade, with a net of minus 1 per cent for this crucial part of the UK economy, which indicates job cuts may be on the way.

The overall nationwide outlook looks a little better at plus 4 per cent, but that still represents its lowest level since 2012, when the economy was mired in gloom. 

The survey data follows hot on the heels of the dismal official figures concerning manufacturing output in April, showing an unexpected 1.4 per cent fall, the steepest for five years.

It bears repeating that Britain is currently still a member of the European Union, with all the benefits of the single market, the customs union, frictionless free trade around the continent and privileged trading arrangements with a raft of external countries. 

Things could obviously get nasty very quickly when that is removed, especially if the government’s floundering efforts fail to secure a workable deal, which looks increasingly likely. You don’t have to take my word for it, however. Just check out the modelling done by the Department for Exiting the European Union. 

A recent TUC analysis showed that real wages are still worth £24 a week less than they were before the financial crisis of 2008 struck. They are not forecast to return to their pre-crash level until 2025, representing their slowest recovery in two centuries, under a period of mostly Conservative rule. 

So Ms May really has nothing at all to gloat about. The whips would be advised to supply their chosen lickspittle with an alternative subject. 

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