The Latest ONS Labour Market Comments
The Latest ONS Labour Market Comments
The CBI today commented on the latest official labour market data, showing that employment fell by 16,000 and unemployment fell by 57,000 in the three months to May, while the number of people taken on as employees rose by 34,000.
Neil Carberry, CBI Director for Employment and Skills, said: “Unemployment rates are still high, but there are some encouraging signs in this jobs data that support the more upbeat mood in the economy.
“More people are getting full-time work, fewer people are signing on, and pay levels are starting to rise.
"It's important to remember that employment typically lags economic performance and, as the economy picks up, we'd expect to see an improvement in the jobs market."
Responding to the latest ONS labour market statistics, the OECD Employment Outlook and the launch of traineeships for 16-24 year olds, Mark Beatson, chief economist at the CIPD, comments: “Today’s labour market statistics appear consistent with the trend in recent months towards a modest but continued expansion of the labour market. Employment has increased marginally since the previous quarter and unemployment is down again, with the growth in full-time jobs rather than part-time jobs. Interestingly, the non Labour Force Survey based measures of labour market activity suggest a stronger rate of activity with a fall of 21,000 in numbers claiming Job Seekers’ Allowance and an increase of 24,000 in the number of job vacancies.
“However, the latest figures also show the squeeze on real earnings continues: average pay excluding bonuses increased by just 1% at a time when the government’s target measure of inflation increased by 2.7%. Using this measure of inflation, average real earnings have fallen by 8% since their peak in January 2009. This will have helped to keep unemployment down but may be a reason why consumer confidence remains subdued.”
“Today’s Employment Outlook report issued by the OECD is a reminder that reducing unemployment will be a long, hard slog for most OECD countries. UK unemployment is projected to remain around its present rate into next year. The OECD report also highlights the high levels of youth unemployment and the increasing numbers of long-term unemployed in the UK as areas for concern. Clearly, stronger economic growth would increase labour demand and improve job prospects for the unemployed – but it is likely to also require continued and effective support for jobseekers and a commitment from employers to invest now in developing their workforces for the future. Today’s announcement by the Skills Minister of the publication of a framework for delivery of traineeships for 16-19 year olds is therefore a welcome development if it means that fewer young people fall through the gaps in the system and more find their way into high quality apprenticeships and continued education”.
RECDirector of Policy and Professional Services Tom Hadley said: “Today’s figures are a positive sign that the countdown to the UK jobs market & lsquo;blast off’ has started. They also support the REC’s jobs data from earlier this month which showed that the number of people being placed in permanent jobs is at a two-year high and demand for staff at a three year high.
“Youth unemployment is an on-going issue, especially now when thousands of new jobseekers are set to leave education and enter the world of work. Although there is good news that the number of unemployed 16-24 year olds fell in the last quarter, the total number of young people in employment also dropped. Recruiters tell us that making the first step and accessing the jobs market can seem like an insurmountable barrier to young and inexperienced jobseekers. The government needs to ensure that these young people are coming into the jobs market with the skills and awareness that employers are looking for. Developing a careers guidance network that is fit for purpose would be a good start.”
Peter Searle, CEO of Adecco Group UK & Ireland, “Today’s labour market statistics show that there is still a massive number of unemployed 16 to 24 year olds (959,000) and that the employment market is still tough for young job seekers. Young people need to ensure they cast their search wide to increase their chances of getting through application stage and interview.
“Greater commitment is required from businesses to create relevant work experience opportunities, and employers need to be more engaged in education. It is in an organisation’s interest to deliver work experience opportunities which will allow young job seekers to compete on a more level playing field, therefore ensuring there is a pipeline of talent for the future. Unless these issues are addressed urgently, young job seekers risk being permanently excluded from the job market and companies could be faced with a serious talent shortfall.”
Tara Ricks, managing director of Randstad Financial & Professional, a specialist financial services recruiter, said: “The headline figures tell barely even half the story. Our unemployment rate is still the fifth highest in the G7, mainly because low-skilled job hunters and graduates continue to struggle to find work. They’ve been hit disproportionately hard by the downturn. Employers are demanding specialist, more vocational skills sets, which graduates and workers without professional qualifications lack. Although grad recruitment is starting to pick up again – particularly in areas like financial services – around 1 in 5 university leavers are still unemployed.
“But employer confidence is on the rise, which should start to thaw the frost that still lingers on the labour market. Employers are more convinced the worst of the economic crisis is behind us, and hiring is picking up as a result. Firms are more intent on taking on new staff, which should ease the burden on overstretched employees who have been working in ultra-lean teams. In areas like insurance, there is less of a focus on restructuring and regulatory changes, and firms are taking on more staff. In financial services we’ve seen firms demanding employees with specialist skill sets, particularly for jobs focusing on risk and regulation. This is part of a broader shift, with employers demanding more specific, vocational skills rather than a broad-brush education.”
Flora Lowther, head of research at Adzuna, commented: “UK employment levels are holding relatively steady, and compared to most of our European peers, there’s much more vitality in the UK job market. There were over 504,000 open job vacancies last month, up 2.5% from June 2012, indicating greater employer confidence in the labour market and the economy. These stable employment levels have come at a cost though: wage growth hasn’t kept pace with inflation since 2007 and it's clear that employers are keeping a lid on the salaries for new hires. The average advertised salary has fallen 2.1% since last year, and currently stands at just £33,414. There are also wild regional disparities in the availability of jobs in Britain, with the labour market balanced disproportionately towards the South East. Almost half (46%) of the jobs currently advertised are in London and the South East, while those looking for work in the North East have just 3.3% of the jobs to choose from.”