Glass half empty or full? The 2 methods of viewing newest UK jobs figures

There are two methods of trying on the state of Britain’s labour market. In a single it’s a case of the glass being half full, within the different half empty.

If you’re a authorities minister you’re taking the previous view. Nadhim Zahawi stated the unemployment fee of three.8% has hardly ever been decrease in a long time and the chancellor is true about that.

What’s extra, the economic system continued to create internet new jobs within the three months to June, with employment rising by 160,000 over the quarter. Flash estimates recommend the sample continued into July.

With job vacancies at near-record ranges, the labour market appears to be like in good condition to face up to the recession the Financial institution of England is forecasting for the UK. The economic system contracted barely within the three months to June, however demand for staff remained robust.

That’s the upbeat means of trying on the newest jobs figures from the Workplace for Nationwide Statistics. Ruth Gregory, UK economist at Capital Economics, says “by any metric the labour market continues to be very tight”.

A glass half empty observer sees issues otherwise, and would level to the slower tempo of employment development, proof that job vacancies are previous their peak and the document hole between common pay (unadjusted for bonuses) and the speed of inflation.

Samuel Tombs, the chief UK economist at Pantheon Macro, says demand for labour is stabilising simply as the availability of staff is selecting up. The rise within the dimension of the workforce is being pushed by immigration, he notes, with the variety of non-UK nationals both working or in search of a job rising by virtually 250,000 prior to now yr.

The home labour drive can also be more likely to improve as folks attempt to keep their residing requirements at a time when price of residing pressures are intensifying, and this can result in larger unemployment as a weakening economic system results in fewer job alternatives.

In the end, the labour market information exhibits the place the economic system has been however doesn’t essentially present the place it’s heading. Employment development was wholesome because the UK got here out of lockdown. Annual common pay development has picked as much as 4.7% as companies have struggled to seek out staff.

The query is whether or not these days at the moment are prior to now, because the Financial institution of England actually thinks. Threadneedle Road sees a protracted recession pushing the unemployment fee to above 6% by 2025. Judging by probably the most up-to-date proof, that course of has began.