Economic activity decreases again
According to the latest Labour Force Survey (LFS) from the ONS, its estimated that for the period of January to March 2022 there was a decrease in the unemployment rate, while the employment and inactivity rates increased.
Even though the market is contracting, the employment rate increased by 0.1 percentage points on the quarter to 75.7%, however this is still below pre-pandemic levels. According to figures, the increase in the employment rate was driven by the movement of people aged 16 to 64 years from unemployment to employment. However, there was also a record-high movement of people from economic inactivity into employment with total job-to-job moves also increasing to a record high of 994,000, driven by resignations rather than dismissals, during the January to March 2022 period – the Great Resignation continues…
The estimated number of payrolled employees for April 2022 shows a monthly increase, up 121,000 on the revised March 2022, to a record 29.5 million.
The unemployment rate for January to March 2022 decreased by 0.3 percentage points on the quarter to 3.7% and for the first time since records began, there are fewer unemployed people than job vacancies.
Tania Bowers, Global Public Policy Director at APSCo commented on the skills shortages: “The skills shortages in the UK are reaching concerning levels and this latest data shows the scale of the pressure on employers and the staffing sector as demand continues to outstrip supply. We’ve seen some encouraging signs from the Government, including the highly skilled immigration visa which was announced by the Chancellor earlier this year.
“However, we are concerned that the absence of the Employment Bill in the Queen’s Speech is an indication that the immediate skills crisis has slipped off the priority list for the Government. At a time when the job market is growing at unprecedented rates and competition is rife, more appropriate regulation is needed for the modern labour market.”
The economic inactivity rate increased by 0.1 percentage points to 21.4% in January to March 2022 and this recent inactivity is believed to be driven by those aged 50 to 64 years.
The number of job vacancies in February to April 2022 rose to a new record of 1,295,000. However, the rate of growth in vacancies continued to slow down.
Kate Meadowcroft, Employment Partner at legal business, DWF, commented on the UK Labour Market figures regarding increased pay: “Undoubtedly the cost-of-living crisis and soaring inflation will have a knock on effect on the labour market. ONS figures have previously shown that although wages have risen, once you consider inflation pay is actually falling. Employees will be seeking out the most attractive rewards packages in order to combat the financial repercussions of the turbulent economy.