Wages drop below the inflation rate

Workers' earnings have fallen in real terms, according to the latest official figures. The December inflation rate under the RPI was 4.4% but the same month average earnings for the whole economy rose by only 3.8%. All sectors were affected but public sector workers suffered the most as their earnings rose on average by only 3.3% at the end of 2006 - a gap of 1.1 percentage points.

Unemployment fell on both official counts, according to the latest figures. Under the Labour Force Survey (LFS) count it was down to 1.7 million in the final quarter of 2006, a 29,000 drop compared with the last quarter. The LFS count is the government's preferred measure and includes people not eligible for benefits. The unemployment rate was down to 5.5%.

January marked the fourth successive monthly fall for unemployment under the claimant count, which only includes those drawing Jobseeker's Allowance - it fell by 13,500 to 925,800, making the unemployment rate 2.9%.

Unemployed men on benefit dropped to 678,500 - a 4.0% rate - and unemployed women totalled 247,300 - a 1.7% rate.

The manufacturing sector lost 63,000 jobs in the final quarter of 2006 compared with a year earlier. They now number just 3.02 million.