Figures released this week by the ONS show that in the three months to April 2016, employment rose by 55,000, and unemployment fell by 20,000. Youth unemployment, at 13.6%, was at an historic low.
Another strong set of labour market figures, with rising employment and falling unemployment, suggests that the economy may not have softened as much as feared in the early months of 2016. Our flexible and dynamic labour market remains a source of strength for the UK economy.
The fall in youth unemployment is also encouraging, but the jobless rate for this age group remains consistently higher than for other age groups, and this is an issue that must be addressed.
Growth in earnings, though picking up slightly, remains muted, so the MPC should persevere with low interest rates.