The UK's unemployment rate fell to 7.6 per cent between July to September, pointing to a continued strengthening in the labour market. Analysts had expected it to remain unchanged at 7.7 per cent.
The current rate of unemployment improvement would see the Bank of England's seven per cent threshold met in the fourth quarter of 2014.
The employment rate for those aged from 16 to 64 was 71.8 per cent, up 0.3 percentage points from April to June 2013 and up 0.6 from a year earlier. There were 29.95m people in employment aged 16 and over, up 177,000 from April to June 2013 and up 378,000 from a year earlier.
The number of people unemployed fell in the three month period by 41,700 to 2.47m, after expectations of a decrease of 35,000 and August's revised fall of 44,700. The claimant count rate in September was 3.9 per cent. The claimant count is now at its lowest since January 2009. To put that in context, says Berenberg's Robert Wood, "the total number of jobless benefit claimants is now 1.3m. So that is a nearly 10 per cent fall in the number of jobless claimants in three months."
Average earnings excluding bonus (regular pay) edged up 0.8 per cent in the three months to September, although that's still below the inflation rate and growth remains low compared with past norms. Total pay was up 0.7 per cent in the period.
Esther McVey, minister for employment, said in light of the figures:
Today's figures show that the number of people in work has risen by more than a million under this Government, with the growth driven by full-time private sector jobs.
At the same time, the number of people claiming the main out-of-work benefits has fallen by almost half a million. There's more work to do, and we are not complacent, but these are all very positive signs.
We're expecting the Bank of England's quarterly inflation report at 10.30am, along with a speech from governor Mark Carney.
IHS Global Insight's Howard Archer:
This is a strong set of labour market data, indicating that unemployment is currently coming down pretty rapidly in reaction to the economy’s markedly improved performance in recent months and much healthier business confidence. The drop in the unemployment rate to 7.6% in the three months to September can only fuel market expectations that it will get down to 7.0% by early-2015 and that the Bank of England could very well start raising interest rates then, regardless of the message that the bank gives out in the November Quarterly Inflation Report.
Meanwhile, average earnings growth is currently showing little signs of moving up appreciably despite the strengthening labour market and this is maintaining a significant squeeze on consumers’ purchasing power. The squeeze has eased a little with average earnings growth edging up to 0.9% in September from 0.6% in August and consumer price inflation retreating to 2.2% in October, but it is still appreciable.