Unemployment rate falls to 4.0%
Estimates from the Labour Force Survey show that, between June to August 2018 and September to November 2018, the number of people in work increased, the number of unemployed people was little changed and the number of people aged from 16 to 64 years not working and not seeking nor available to work (economically inactive) decreased.
There were an estimated 32.53m people in work, 141,000 more than for June to August 2018 and 328,000 more than for a year earlier.
The employment rate (the proportion of people aged from 16 to 64 years who were in work) was estimated at 75.8%, higher than for a year earlier (75.3%) and the highest since comparable estimates began in 1971.
There were an estimated 1.37m unemployed people (people not in work but seeking and available to work), little changed compared with June to August 2018 but 68,000 fewer than for a year earlier.
The unemployment rate (the number of unemployed people as a proportion of all employed and unemployed people) was estimated at 4.0%, it has not been lower since December 1974 to February 1975.
There were an estimated 8.65m people aged from 16 to 64 years who were economically inactive (not working and not seeking nor available to work), 100,000 fewer than for June to August 2018 and 86,000 fewer than for a year earlier.
The economic inactivity rate (the proportion of people aged from 16 to 64 years who were economically inactive) was estimated at 21.0%, lower than for a year earlier (21.2%) and the joint-lowest estimate since comparable estimates began in 1971.
Latest estimates show that average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 3.3% excluding bonuses, and by 3.4% including bonuses, compared with a year earlier.
Latest estimates show that average weekly earnings for employees in Great Britain in real terms (that is, adjusted for price inflation) increased by 1.1% excluding bonuses, and by 1.2% including bonuses, compared with a year earlier.
David Morel, CEO of Tiger Recruitment, said, "The latest employment figures reflect what we’re seeing in the recruitment market, which is that permanent roles have been unaffected by Brexit uncertainty. In fact, at Tiger we saw a 40% YOY increase in permanent roles in December - indicating that businesses aren’t putting their long-term plans on hold just yet.
"Candidates are still happy to move roles and the market remains relatively buoyant. In 2018, we saw an 11% growth in permanent salaries year-on-year, as demand and competition for the best people and the most specialist skills intensifies. There are also signs that skills shortages have been exacerbated by a reduction in talent coming over from the EU in light of the referendum result.
"The only area where we have seen a contraction is in temporary hiring, particularly amongst SMEs. Although we would usually expect to see businesses take on more temps at times of uncertainty, in this case, it appears that smaller businesses are trying to cut short-term costs and increase their cash reserves in preparation for a ‘no deal’ Brexit.
"Despite the relatively positive outlook, employer concerns are probably at the highest level I’ve seen since the Brexit vote. Businesses desperately need some clarity soon, if we are to avoid a recruitment downturn in the coming months."
Pawel Adrjan, UK economist at Indeed, commented, “Employers’ insatiable demand for staff has pushed the employment rate up to a new record level. But the supply of available workers now risks being stretched to breaking point.
“With unemployment falling again - this time to a 44-year low - there simply aren’t enough jobseekers to keep up with demand. That’s why the number of unfilled vacancies is creeping up.
“The problems are being exacerbated by Britain’s waning appeal to European workers. Migration data shows EU citizens are leaving the UK at the fastest rate for more than two decades, and Indeed’s online job search data shows that the UK’s gravitational pull as a source of jobs is loosening.
“As other European economies pick up steam and the weak Pound and Brexit uncertainty weigh on Britain’s appeal, more EU workers are finding more reasons to look for work elsewhere.
“The net effect is a surplus of jobs that cannot be completely filled. While in the short term this is propelling wages upwards as employers fight to attract talent, in the longer term they will need to tap into underutilised sources of workers like single parents, people with disabilities and ethnic minorities too."
Jon Boys, labour market economist for the CIPD, stated, “The figures released today can be seen as good news for employees as the tight labour market is feeding into real pay growth. With inflation forecast to be lower than previously expected pay growth is likely to continue into 2019.
“In the absence of productivity growth to fund it, paying staff more is a strategy that can’t be used indefinitely. Businesses should consider retention and training of their current workforce to raise productivity and fill skills gaps.
“Overall, there is little here to concern policy makers in the short term – the UK labour market remains robust. These statistics must be tempered however, as they relate to halcyon days of September to November when government’s Brexit guidance still referred to a no deal Brexit as unlikely.”
Recruitment & Employment Confederation (REC) director of policy, Tom Hadley, said, “Despite the ongoing political turbulence, employers are continuing to hire. Today’s data shows a joint-record number of vacancies, underlining the fact that the supply of staff remains a major challenge and a threat to business growth.
“Reassuring people from the EU working across a range of sectors in the UK must remain a priority, with yesterday’s announcement by the Prime Minister to scrap EU citizens’ settled status fee sending out a much needed positive message.
“However the politics play out over the coming weeks and months, employers will need to continue innovating in how they hire and attract staff to fill vacancies. Recruitment professionals will play a pivotal role in finding new ways of meeting workforce challenges in high-demand sectors, ranging from engineering and healthcare to hospitality, construction and logistics.”
Photo courtesy of Shutterstock.com