Unemployment edged down to 4.7 percent, yet firms are advertising fewer jobs, and the ONS points to the cost of hiring.
LONDON, England (Biz House) – Here is a puzzle for anyone squeezed onto the morning Tube: unemployment fell, the employment rate rose, and yet the number of jobs on offer has dropped to a level not seen outside the pandemic for over a decade. All of that is true in the same set of official figures, which is a little like a pub where the queue has shrunk because the bar has stopped serving.
Headline numbers that point in opposite directions
The Office for National Statistics, in its labour market overview, put unemployment at 4.7 percent for the three months to August, down 0.1 points on both the quarter and the year. The employment rate for 16 to 64-year-olds rose to 75.3 percent. In its companion bulletin on employment in the UK, the statisticians counted 1.712 million people out of work and 113,000 reporting redundancy in the three months before interview, a rate of 3.8 per 1,000 employees that was flat on the year.
Then the other column. Vacancies fell by 21,000, or 2.9 percent, to 691,000 for the July to September period, and are down 5.1 percent on the year. FE News, summarising the release, said that is the lowest level outside the pandemic since the same quarter of 2014. Payrolled employees were down 111,000 on the year to August, and the claimant count rose to 1.701 million in September. The ONS adds a standard caution that survey estimates of this kind are volatile, so I would read any single quarter with a raised eyebrow.
Why firms are not advertising
The explanation the ONS offered, as FE News relayed it, was that smaller firms are not recruiting because of higher labour costs. Kevin Fitzgerald of Employment Hero put numbers on the mood: small business employment growth slowed from 4.9 percent in March to 2.9 percent in September, and he said SMEs were holding back ahead of the Autumn Budget. Jack Kennedy of Indeed described the market as “treading water”, reading the fall in vacancies as caution before the Chancellor spoke.
That is a fair reading, but it is also worth saying what it is not. None of the commentary I read claims the Budget itself caused the dip; the warning is about uncertainty, which is a cost that never appears on a payslip. Employers’ real worry, according to the ONS explanation, is the bill for taking on staff. Both can be true, and the figures cannot separate them.
Pay: who is getting the rises
Regular pay and total pay both grew 3.7 percent in the three months to August. FE News noted that total pay growth is at its lowest in nearly six years. The split matters more than the average: public sector regular pay grew 6.3 percent while private sector pay grew 3.0 percent. Anyone who has been told that the state pays badly and the private sector pays well might care to check the latest column of numbers.
Adjusted for inflation, regular pay still rose, by 0.6 percent using the CPIH measure and 0.8 percent using CPI, and the ONS described regular pay growth as relatively stable across six consecutive three-month periods. The catch is timing. The pay figures end in August, while the inflation figures for September, published a day after the jobs data, showed CPI rising to 3.5 percent. A real-terms cushion built on 3.1 percent inflation looks thinner on 3.5.
The young and the unlucky
Youth numbers carry the sharpest edge. FE News reported that 13.3 percent of economically active young people not in full-time education, about 446,000, were unemployed, up 28,000 on the year. Chris Goulden of the Youth Futures Foundation said tackling the numbers not in work or education needs system-level reform. Anthony Salcito of Coursera called it a challenging and sparse market for graduates. Jeanette Wheeler of MHR wanted lower business costs and clearer guidance on AI.
I have not found a London-specific breakdown in this coverage, so I will not pretend to tell you how the capital compares. What I can say is that a city which hosts the City, a vast technology scene and several universities has a particular stake in whether the young find work.
A short detour for the comedy-minded
I write for The London Prat, and you can find more of my London business reporting there. If the jobs data has you refreshing job boards with the energy of a pigeon at a bakery window, the paper’s English humor news section is cheaper than a career coach, and British humor news is the next stop. There is also a Cockney rhyming slang explainer for describing your pay rise in the vernacular. And if you would like your humor served with an American accent, Bohiney Magazine is the place. None of that applies to the figures above, which are all from official releases.
What happens next
The next ONS labour market release is due on 17 November. By then we will know whether small employers have started to hire again now that the Budget has landed, or whether the pause has settled into habit. For now, the picture is a labour market that is not collapsing and not moving, where the jobless count looks fine and the job board looks thin. Call it a long queue at a very quiet counter.
SOURCE: https://bohiney.com/