Current Labour Market Updates – Considering the cost of living and other economic factors, information about labour markets are invaluable. What do the latest figure show?
The key trends are:
- Employment levels and vacancies are high, while unemployment is at historically low levels
- Number of people who are not economically active is rising
- ONS reports that the ratio of unemployed people to vacancies hit a record low, underscoring the hiring problems facing many employers in some sectors.
Key figures
- In June – August 2022, the number of people aged 16+ in employment was 32.75 million, and the employment rate was 75.5%, down from 75.9% in the previous quarter.
- Unemployment levels have fallen in the last quarter and over the last year and are 188,000 below their pre-pandemic levels.
- The number of vacancies fell in the last quarter to 1.25 million in July – September 2022 but have increased over the last year. Vacancies are 450,000 above pre-pandemic levels.
- Average wages fell in real terms in the three months to August 2022, with an annual change of -4.0% excluding bonuses and -3.5% including bonuses.
Inflation is currently exceeding wage growth which is causing the real value of wages to fall. There are signs of the level of vacancies starting to fall, and this is expected to continue with the economic growth stagnating and interest rates expected to continue to rise.
The Labour Force Survey (LFS) shows a significant decrease in the unemployment rate over the year to June – August 2022 to 3.0%. The economic inactivity rate remains at 2.2% above the pre-pandemic position and the unemployment rate is 0.5% above the pre-pandemic period.
The high rate of inflation means that earnings continued to fall in real terms in the three months until August 2022. The fall in the latest period was slightly lower than recent falls, but remains one of the biggest falls in earnings growth since records began in 2001.
Still, employment also fell in this quarter, while there was a large increase in economic activity. There were over half a million people who were inactive than there was pre-pandemic period. The number of vacancies fell again in the last quarter, but remain well above pre-pandemic levels.
Low unemployment rates and high vacancies mean the labour market is still very tight; the economy is close to full employment and recruitment is more difficult than usual. According to the Bank of England this is happening because of the growth in the number of economically inactive people since the beginning of the pandemic. Lower net migration from the EU also caused a fall in the number of people in the labour market.
This fact and the miss matches between people looking for work and the available vacancies causes recruitment difficulties and labour market tightness. Labour market tightness is a causal factor in the growth of nominal wages, and is also causing some upward pressure on inflation, though recent increases in inflation are mostly due to large increases in global energy and goods prices.
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Here you can read more about how you can prepare for peak. Alternatively, please send us an email at info@impactrecruitmet.co.uk or give us a call on 01604 239555 to find out how we can help.
Sources:
- https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/uklabourmarket/october2022
- https://researchbriefings.files.parliament.uk/documents/CBP-9366/CBP-9366.pdf
- https://datavis.nisra.gov.uk/economy-and-labour-market/labour-market-report-october-2022.html
- https://www.rec.uk.com/our-view/research/jobs-outlook/jobsoutlook-october-2022
