• For the first time there are more job vacancies than people unemployed
• UK unemployment rate drops to 3.7% - lowest since 1974
• Regular pay lags inflation as cost-of-living squeeze tightens
Danni Hewson, AJ Bell financial analyst, comments on the latest ONS job figures:
“There’s been a record number of people moving job over the last quarter as the cost the living squeeze really begins to grab hold of the country suggesting workers are chasing higher pay in an increasingly tight labour market. For the first time since records began there are more vacancies than people out of work, a situation that’s forcing employers to adopt whatever methods they can to tempt workers to jump ship. People power the motor, without them businesses can’t function properly, but businesses are also struggling with rising costs and looking at where those vacancies are still sprouting up it’s the larger companies, those that have deeper pockets which are still hiring whilst the smallest employers are cutting back.
“People are working more hours, part time numbers have jumped up suggesting that calls from some quarters that people need to take on extra jobs to make ends meet is something that’s already happening. Because wages, though they are going up and by a decent amount, they are no match for inflation and once it takes its bite, people’s pay is falling significantly.
“And the total number of hours worked is still down on pre-pandemic levels but that’s because the workforce has shifted. Self-employed numbers are still down significantly on where they were, many over 50s still haven’t returned to the workforce and economic inactivity has jumped up a little once again primarily because people have family or home commitments and might struggle now working from home is no longer the “norm”.
“How does today’s jobs picture play into the overall economic puzzle being pondered by politicians, business leaders and the Bank of England? Job vacancy numbers and the battle to recruit might push businesses to up pay, adding fuel to the inflationary fire the Bank of England is trying to put out. Further rate rises seem inevitable as 14 out of 18 industry sectors have increased vacancies over the last quarter, with construction and arts and entertainment at the front of the pack. But the number of new vacancies is slowing and for some people, increased costs in things like fuel and childcare make work unaffordable. And for those working two or even three jobs and still struggling to get by it’s not rate hikes they’re after but more tangible help, an immediate solution to their own personal crises.”
