The latest labour market data published this morning show that conditions in both the Scottish and UK labour markets continue to improve. In the latest quarter, August - October, employment rose by nearly eleven thousand (10,651) in Scotland an increase of 0.4%. UK employment rose by 250,000, an increase of 0.8%. Unemployment fell by more than seven thousand (-7,352) in Scotland, a fall of -3.6%, to a rate of 7.1%. In the UK, unemployment also fell by just under one hundred thousand (-98,718), a fall of -4.0%, to a rate of 7.4%.
So while both countries enjoyed an improvement in jobs and unemployment, the improvement in the UK in this quarter was slightly better than in Scotland.
The chart below shows where both Scotland and the UK now stand in jobs terms in their recovery.
UK employment is now about 2% above its pre-recession peak whereas in Scotland it is nearly at the peak but at -0.2% below just not there yet.
The next chart shows our estimate of 'real' compared with actual unemployment in Scotland.
This shows a slight widening again between the two because the numbers inactive rose again by more than ten thousand (10,456) in the latest quarter.
Finally, it would appear that there is still plenty of slack for growth in the Scottish labour market and more than in the UK as the chart of employment to working population shows.
The ratio in Scotland now stands at -2.9% below the pre-recession peak compared to 2.2% in the UK.
With earnings growth almost flat, and inflation falling, these data offer further evidence that there is still no justification for the Bank of England to 'apply the brakes', in the form of a rise in interest rates. This is likely to be the case even when the unemployment rate falls below 7%.