UK jobless figure 'falling like a stone' but wages keep shrinking

The squeeze goes on. That was the Sky News headline on the latest economic indicators released this morning.

The figures show a further fall in unemployment – it's "falling like stone" says the FT. But – and it's very big but – they also show that wages are not keeping pace with inflation. In other words, Labour's Ed Miliband and Ed Balls have good reason to keep banging on about the cost-of-living crisis.

The Office of National Statistics figures show the number of people out of work fell by 161,000 to 2.16 million in the three months to April, bringing the unemployment rate down to 6.6 per cent.Also, the number of people in work rose by a record 345,000, to 30.5 million, most of which are in full-time employment.The number of people claiming Jobseeker's Allowance in June fell by 27,400 to 1.09 million, the ONS added.The FT’s economics editor, Chris Giles, tweeted: “Unemployment is falling like a stone (single month estimates)”, and produced a graph to prove his point.

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Now the bad news: average earnings growth has dropped to 0.7 per cent, way below the 1.2 per cent growth predicted by some economists and substantially behind the 1.8 per cent rate of inflation.

As Robert Peston, the BBC’s economics guru, tweeted: “So unemployment falls sharply, but inflation yet again outpaces wage rises (by quite a margin)...”

So, Miliband and Balls will feel vindicated in sticking to their “cost-of-living” crisis mantra against recent sniping by former Blair-era Labour Cabinet ministers Peter Mandelson and Charles Clarke.

Clarke was at it again this morning on Radio 4's Today programme, accusing Balls and Miliband of allowing the Chancellor George Osborne and the Prime Minister David Cameron to gain a lead on the economy.

“I think Labour hasn’t succeeded to put out our own economic story and what we are going to do now," said Clarke. "The Conservatives have succeeded in winning the case that the economic problems they had in 2010 were entirely down to the Labour government which I don’t think is right, but is believed by a lot of people," said Clarke.

Clarke was talking more than an hour before the new figures were released. But he would doubtless still argue that his main point stands: that whatever Labour say about the cost of living squeeze, the public just don’t believe Balls and Miliband on the economy – mainly because they both predicted unemployment would rise as a result of Osborne’s austerity measures, and everyone knows they haven't.

Which allows Cameron to say confidently this morning: “A record rise in employment for last three months. 5,500 more people in work each day. All with the security of a pay packet and brighter future.”

Yes, but…