The balance of power is shifting from employer to employee

Over the last few years we've seen wages kept low by the simple dynamics of supply and demand. There have been more unemployed than there were jobs. Part time work has made up a lot of the gains but full time jobs have been increasing too

A year or so ago I made the point that the balance was tilted in favour of the employer who had a large pool to pick from. That pool is shrinking and now it's the jobseeker that is gaining control

There's no need for firms to raise pay when there's a fight for jobs. There is a reason when the queue of people applying for jobs shortens or you need to employ higher skilled workers

The claimant count rise today has mainly been driven by lower numbers in part time work and that could be for a number of reasons. People could be feeling more confident about getting a full time job so are leaving part time work to join training programs for full time roles, employers are starting to be more selective over the skill levels of staff and are converting some part timers and chopping others. A skills shortage is leaving unskilled people in the jobs queues

Recently recruiters have said that they are struggling to fill vacancies for skilled jobs. Placements rose a the slowest pace in 2 years. That has a big effect in the growth of wages. Instead of being spoilt for choice now firms have to pay up. It also opens the door to people being able to switch jobs and demand higher pay. The jobs market looks to be entering the next phase and this will be where wage growth really kicks in. Before, the supply of unemployed was ample, and now that supply is falling so the "market" must pay more

For the jobs market it could mean a shift in the numbers that may look bad on paper, but aren't in reality. Claims may rise and so might the unemployment rate as people become choosy about what jobs they take. There may start to be more jobs than applicants. It doesn't mean that claims and unemployment will shoot up but we could see a period where both rise until the labour market finds its equilibrium. We're never going to have zero unemployed and zero claimants so the market will find a base and settle down

I can't pin all the above on one jobs report but it has been something I've been waiting for. It's the natural progression of an economy and these little changes in direction can mean the economy taking the next little step

The BOE will be watching for further signs of this shift as they will be adding it into the rate rise mixing bowl. If wages carry on growing at the current rates then that will bring the chance of rate hikes forward. The effect of higher wages will filter through into consumer spending, borrowing and prices will rise as there will be less need to go bargain hunting

This doesn't mean that the UK is suddenly the best country in the world and everyone is driving Aston Martins, or is free from the other millstones around its neck, but it will mean that the level of being and feeling better off will rise, and that sentiment is very important for an economy

It's been slow steps but this could be another sign that the UK is on its way to mending itself

Skilled work is where the UK jobs market is heading