The Office for National Statistics (ONS) has published its recent labor market data. This report indicates a softer market, as job vacancies are returning to levels seen before the pandemic and salary increases are decelerating. Neil Carberry, the Chief Executive of the Recruitment and Employment Confederation (REC), provided commentary on these statistics.
He observed that despite some encouraging signs, such as a rise in temporary employment, challenges persist. “Employment rates remain significantly lower than the levels prior to the pandemic, and the rate of economic inactivity is excessively high,” Carberry stated. It is crucial for the incoming government to collaborate with businesses to tackle this issue and to ensure that its proposed workplace regulations don’t create obstacles for individuals who are eager to find work.
Although the number of job vacancies is still decreasing, it remains 11% above the figures seen in early 2020.
The unemployment rate has seen a slight decline compared to last year. There were small increases in total employment and in the number of individuals on payroll in the most recent quarter.
ONS uncovers emerging labor market patterns
On a global scale, stock markets and digital currencies experienced a significant decline last Monday attributed to the unwinding of the Japanese Yen carry trade. The International Energy Agency (IEA) maintained its 2024 projection for global oil demand growth but reduced expectations for 2025, citing weak economic growth in China dampening overall global gains. Enhancing workforce participation remains a top priority for the Labour government.
With close to 10 million inactive working-age individuals in the UK, the challenge lies in encouraging these potential workers to re-enter the labor market without increasing wages and causing inflation to surge again. Regular pay growth fell to 5.4% year-on-year in June, still above the historical average. Ongoing wage and price pressure may constrain the scope for monetary easing that the Bank of England is able to implement in the near future.
The government aims to tackle healthcare backlog issues, broaden childcare availability, and improve employment support to foster greater labor force participation. Increasing the number of inactive workers is vital for enhancing the sustainable growth rate of the economy while keeping inflation in check.
