At first glance, the latest set of UK labour market data, released this morning, were stronger than expected. Claimant count unemployment fell by 32k in February when a 24k rise was expected. The ILO measure, regarded as more economically meaningful, fell by 33k during the three-months to February. But unemployment is only one part of the picture. In the three-months to February, employment also fell, by 54k. The fall in the number of employees, at 86k, was particularly large. And inactivity, which includes those who are not looking for work, or are unable to start work, rose by 185k over the same period, driven by a 98k rise in the number of students. The rise in inactivity was the strongest since at least the early 1970s. In our view, the UK labour market remains particularly fragile. As our chart shows, employment is on a downward trend again. The fall in ILO unemployment is of little comfort when inactivity is rising so sharply.

Similar points were also made this morning by the BBC's economics editor Stephanie Flanders in her blog post, Not lagging, but not leading either.