UK labour market: resilient, but fear of future lower growth

 

The most recent labour market statistics published by the Office for National Statistics (ONS) show the number of vacancies at 870,000 for November 2018 to January 2019 – 16,000 more than for August to October 2018 and 46,000 more than a year earlier. This was the highest estimate since comparable records began in 2001.

The unemployment rate was estimated at 4.0%, it has not been lower since December 1974 to February 1975. There were an estimated 1.36 million unemployed people, 14,000 fewer than for July to September 2018 and 100,000 fewer than for a year earlier.

The employment rate was at 75.8%, higher than for a year earlier (75.2%) and the joint-highest since comparable estimates began in 1971. There were an estimated 32.60 million people in work, 167,000 more than for July to September 2018 and 444,000 more than for a year earlier.

Average weekly earnings for employees in Great Britain in real terms (that is, adjusted for price inflation) increased by 1.2% excluding bonuses, and by 1.3% including bonuses, compared with a year earlier.

Recruitment & Employment Confederation (REC) director of policy, Tom Hadley commenting on ONS figures: “Today’s figures once again highlight the resilience of the UK jobs market, with record vacancies and numbers of people in work. However, we cannot take this for granted as the REC’s JobsOutlook data shows a significant downturn in businesses confidence in the UK economy which is already impacting on future hiring intentions.”

“There is a real fear, as we are seeing in the UK manufacturing industry, that we will see lower growth and fewer opportunities in the future. “

Commenting on the latest ONS labour market statistics, Jon Boys, labour market economist for the CIPD, the professional body for HR and people development, commented: “Not only is employment at a record high but the increase in jobs is largely driven by full-time roles. This is good news for jobseekers.

“Today’s official data takes us up until the end of 2018. However, the CIPD’s more recent data suggests that employers expect that both employment and wage growth will stay strong throughout the first quarter of 2019. Nominal wage growth is being driven by the demand for skills. With low inflation expected to continue for most of the year we can expect a real terms pay rise for many in 2019.

“For now, most employers remain optimistic about their ability to take on new staff but with Brexit just a matter of weeks away it’s uncertain how the mood will change after March. To prepare for this, it’s vital that employers plan for a number of possible scenarios for their workforce. While there’s optimism around hiring, access to skills continues to be a challenge for employers. With fewer EU nationals working in the UK as the same time last year, it’s vital that the Government recognises the need for a flexible post Brexit migration system to avoid worsening skill and labour shortages.”

 

Notes

REC’s model predicted the unemployment rate would rise to 4.1% and that there would be an increase in unemployment of 4,000 in the three months to December.

 The unemployment rate actually remained at 4.0% – it has not been lower since December 1974 to February 1975. There were 1.36 million unemployed people, 14,000 fewer than for July to September 2018 and 100,000 fewer than for a year earlier. The employment rate was at 75.8%, higher than for a year earlier (75.2%) and the joint-highest since comparable estimates began in 1971. The number of people aged from 16 to 64 years not working and not seeking or available to work (economically inactive) was 8.63 million, 94,000 than for July to September 2018 and 153,000 fewer than for a year earlier. The economic inactivity rate was 20.9%, the lowest figure since comparable estimates began in 1971. There were 870,000 job vacancies for November 2018 to January 2019 – 16,000 more than for August to October 2018 and 46,000 more than a year earlier. This was the highest estimate since comparable records began in 2001.

Latest estimates show that average weekly earnings for employees in Great Britain in real terms (that is, adjusted for price inflation) increased by 1.2% excluding bonuses, and by 1.3% including bonuses, compared with a year earlier.

Full data and PDF available here.

 

You can view the CIPD’s press release here.

 
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