Employment figures for the UK published today show a small return to growth in employment in the last three months to April this year. The increase in employment has been mainly due to a large increase in employment among older workers, many of pension age, and it is not clear whether this is by choice or whether older workers are finding themselves under financial pressure.
However the increase in employment does reflect a trend in the UK economy over the last two years. The current employment-output situation in the UK or "productivity puzzle" is covered in the latest NERI In-Brief here. One of the main reasons cited for increased employment and reduced growth is the reduction in real wages. As this comment piece from the Resolution Foundation shows, the squeeze on incomes is a real threat to economic recovery and its genesis predates the current crisis.