The number of people in work in the UK has reached a record high of 32.54 million, latest figures from the Office for National Statistics show.
Unemployment was flat, with a small increase of 8,000 between September and November for a total of 1.37 million. Average earnings excluding bonuses increased by 3.3 per cent in the year to November, as wage rises continued to outpace inflation. The number of job vacancies rose by 10,000 to a record high of 853,000.
ONS Head of Labour Market, David Freeman, told the BBC,
The number of people working grew again, with the share of the population in work now the highest on record. Meanwhile, the share of the workforce looking for work and unable to find it remains at its lowest for over 40 years, helped by a record number of job vacancies. Wage growth continues to outpace inflation, which fell back slightly in the latest month.
The unemployment total is 68,000 lower than a year ago, with the jobless rate 0.2 per cent down on this time in 2018. The number of job vacancies rose by 10,000 to a record high of 853,000. The increase in both unemployment and employment is explained by the UK’s rising population and fewer people being classed as economically inactive, which includes those on long-term sick leave, students, and people who have given up looking for a job.
The number of economically inactive people fell by 100,000 to 8.6 million, a rate of 21 per cent, which is the lowest on record.
Employment Minister, Alok Sharma, said
Our pro-business policies have helped boost private sector employment by 3.8 million since 2010, and as the Resolution Foundation’s latest report shows, the ‘jobs-boom has helped some of the most disadvantaged groups find employment’, providing opportunities across society.”
However, Samuel Tombs, chief UK Economist at Pantheon Macroeconomics, warned,
We doubt that wage growth will be sustained over the next six months at November’s strong rate. Pay settlements likely will weaken this year, as the previous year’s inflation rate usually is the starting point for negotiations. Nonetheless, the labour market now looks tight enough to ensure that wage growth does not slip below the three per cent mark.
As did Tony Wilson, director of the Institute for Employment Studies (IES),
The new year has picked up where 2018 left off, with employment records tumbling and pay packets growing. Employment is higher than it has ever been, the unemployment rate is at its lowest since 1975, earnings growth is at its strongest in a decade, and low inflation means that this is feeding through into strong “real” pay growth for the first time in two years.
So, where do we go from here? With unemployment so low, vacancies at their highest ever and EU migration slowing, there is very little spare capacity to meet employer demands. In recent years, we’ve seen more people joining the workforce from “economic inactivity” – typically parents, older people and those with health conditions – but this is slowing fast, with fewer economically inactive people saying that they want a job than ever before. This lack of capacity may well be fuelling pay growth, and, in turn, may start to feed through into inflation.
On the other hand, today’s numbers cover the jobs market as it was between September and November last year – so just before the crises which followed the Brexit withdrawal deal. It may well be that in the next few months’ releases we start to see vacancies and recruitment slowing down and some of the heat being taken out of the labour market. However, this doesn’t change the fact that we need to do more to increase labour market participation and raise productivity.
Recruitment & Employment Confederation (REC) director of policy, Tom Hadley commented,
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.