Tag: labour market report

Unemployment falls by 0.2%

According to the ONS’s latest labour market overview, the UK employment rate remained largely unchanged for July to September 2022 was 75.5%, and 1.1% lower than before the COVID-19 (December 2019 to February 2020). The data revealed that over the latest three-month period, the number of employees decreased, while self-employed workers increased.

Payrolled employees for October 2022 shows another monthly increase, up 74,000 on the revised September 2022 figures, to a record 29.8 million whilst the unemployment rate fell by 0.2% for July to September.

The big news of the week has been confirmed with the report stating that economic inactivity rate increased by 0.2% on the quarter to 21.6% in July to September 2022. During the latest three-month period, the increase in economic inactivity was driven by those who are long-term sick, who increased to a record high. In a recent article published by the ONS explored the economically inactive because of long-term sickness in more detail. It showed that over two-thirds of those becoming long-term sick in 2021 and 2022 were already economically inactive for another reason in the three months before interview.

Vacancies for August to October 2022, fell by 46,000 on the quarter to 1,225,000 but despite four consecutive quarterly falls, the number of vacancies remain at historically high levels. An increasing number of businesses are now reporting holding back recruitment because of economic pressures.

According to the report, growth in average total pay (including bonuses) was 6.0% and growth in regular pay (excluding bonuses) was 5.7% among employees in July to September 2022. This is the strongest growth in regular pay seen outside of the coronavirus pandemic period.

Average regular pay growth for the private sector was 6.6% in July to September 2022, and 2.2% for the public sector. Outside of the height of the coronavirus pandemic period, this is the largest growth seen for the private sector and the largest difference between the private sector and public sector.

In real terms (adjusted for inflation) over the year, total pay fell by 2.6% and regular pay fell by 2.7%. This is slightly smaller than the record fall in real regular pay reported in April to June 2022 (3.0%), but remains among the largest falls in growth since comparable records began in 2001.

Joanne Frew, Global Head of Employment & Pensions at DWF commented: “The latest ONS figures show a steady labour market despite the UK’s ongoing economic struggles. The UK economy is certainly facing a challenging period with soaring inflation and the Bank of England warning that the UK could be set for its longest recession since records began.  The Chancellor, Jeremy Hunt, is due to deliver his Autumn Statement on Thursday 17 November and has already warned that tax rises are necessary to help tackle inflation.  Against this backdrop it is likely that the labour market will face a relatively turbulent time.  Despite the ongoing resilience of the market during the pandemic, it is likely that the economic difficulties will lead to more job losses over the coming months.”

Bev White, CEO of Nash Squared said: “Despite Big Tech recently putting a freeze on their recruitment plans or even shedding jobs, today’s ONS jobs figures show that UK Tech continues to buck this global trend by adding a further 92,000 jobs over the last quarter, and firmly cementing itself as the UK’s standout private sector job creator over the last three years – with almost 350,000 additional jobs created.

“This performance is even more startling when you consider that we’ve lost over three quarters of a million private sector jobs over the same three-year period in the UK.

Despite the downturn, there is little sign of a tech slowdown. Tech investment in the UK is expected to hit its third highest level for more than 15 years and over half (56%) of digital leaders running tech departments in the UK plan to increase their technology headcount this year.”

Lauren Thomas, Glassdoor’s UK Economist also commented: “As news of tech layoffs spreads, Glassdoor’s data shows that employees are increasingly anxious with discussion of layoffs doubling and mentions of recession up tenfold from last October. Hiring has also taken a hit, with mentions of hiring freezes up more than 450 percent.

“However, this isn’t 2008. Unlike the Great Recession, the current shortage of workers is much more acute and even a potential recession would be unlikely to result in the same peak of unemployment as we saw then. There are reasons to be hopeful – vacancies are likely to remain higher and both redundancies and unemployment are lower than before the pandemic.”

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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.”

Economic activity 

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.

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