Tuesday’s labour market data showed that many of the trends of recent months remain in play. The labour market tightened further, participation continued to disappoint and real pay packets kept falling, while nominal pay growth hasn’t yet shown clear signs of accelerating.
The labour market is tight
The labour market is now very tight on several measures. Vacancies are at a record high of 1.3 million. Unemployment fell again, to 3.9 per cent on the three-month measure, nearing its record low of 3.8 per cent. The ratio of vacancies to unemployment is comfortably higher than at any point in the last 20 years. This tightness is broad-based – vacancies are above pre-covid levels in all sectors, and at record highs in more than half of them.
The flip side of near-record low unemployment is sadly not record high employment – there are still 580,000 fewer people in work now than before the pandemic. Instead, there are 515,000 fewer working-age people participating the labour market. In many labour-market cycles, participation initially falls along with employment, as workers become discouraged by the scarcity of jobs, and then gradually rises again as strong employment tempts them back into the labour market.
Chosen excerpts by Job Market Monitor. Read the whole story @ Labour market tight, household budgets tighter • Resolution Foundation