Welsh unemployment rate falls below UK average to 3.8%

Over the last year Wales had the steepest rise in the employment rate across the UK

The unemployment rate in Wales has fallen to 3.8%, lower than the UK rate of 4%, according to the latest figures.

For May to July, the Welsh unemployment rate fell 0.6 percentage points compared with the previous quarter - the second biggest fall in the UK after the south-west of England, which includes Bristol.

In the previous year the Welsh rate fell 0.5 percentage points.

There are 51,000 more people of working age in employment than last year.

That represents 2.4 percentage point increase in the employment rate in Wales - the steepest rise in the UK.

The only other parts of the UK with a lower unemployment rate for May to July 2018 were the east of England, the south east of England and the south west of England.

Economic inactivity has fallen to 22.2%, down two percentage points compared with the same period last year, according to figures from the Office for National Statistics.

However, Wales still has one of the highest levels of economic inactivity in the UK. Only the north-east of England, Yorkshire and Humber and Northern Ireland have a higher rate.

• UK wages rise faster than expected

• The UK towns and cities with the highest and lowest wages

Economic inactivity reflects the proportion of working age people who are not looking for paid work, for example because they are full-time carers, students or on the long-term sick, or have taken early retirement.

Over the same period the UK economic inactivity rate has stayed flat at 21.2%.

First Minister Carwyn Jones welcomed the figures.

"We will continue to do everything we can to build on this success and ensure our economy is in the strongest possible position to face the significant challenges ahead," he said.

Analysis

By Sarah Dickins, BBC Wales economics correspondent

The fact that unemployment in Wales between May and July, at 3.8% of 16-64 year olds, is lower than the UK average of 4% is clearly good news and significant for politicians in Wales.

For many years it has been relatively usual for unemployment in Wales to be higher than the UK rate, although for most of 2016 Wales enjoyed a lower rate which then reversed.

This latest fall in unemployment, compared with February to April, is one of the steepest falls in the UK and was only beaten by the south-west of England. That region includes Bristol, generally considered to be the UK city with the strongest economic growth outside London.

What is interesting is how much Wales can expect to benefit from the reflected heat from the fast-growing economy of Bristol and how much that might be enhanced with the scrapping of tolls on the Severn Bridges.

It is also good news that there are now fewer people described as economically inactive, but Wales still has worrying high levels of people who are not working and not available for work.

A word of caution however - it is often unwise to draw conclusions from one set of figures.