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Signs that the job boom is slowing despite falling unemployment

by LLB Reporter
13th Sep 22 11:57 am

Unemployment rate fell to 3.6%, its lowest level since 1974, official figures out today show.

Pay in real terms fell 2.8% while the period was the largest quarterly fall in vacancies since 2020.

Danni Hewson, AJ Bell financial analyst, comments on latest jobs figures: “It’s been 48 years since unemployment was as low as it is today but behind the headline figures there are signs that the booming jobs market is feeling the strain of the current economic crisis. Vacancy numbers experienced the largest quarterly fall since the same period two years ago after the first lockdown sent shockwaves through the labour market.

“Some companies are freezing recruitment and smaller businesses in particular have been having to make tough decisions about staffing levels as they considered soaring energy bills. Government intervention should help allay some fears, giving business owners a little breathing space, though six months will disappear in the blink of an eye and makes it difficult to plan for the future.

“And recruitment is still tricky. With one vacancy for every person unemployed competition is still fierce and pay is often the ultimate bargaining tool. But despite the fact wages have been rising with regular pay up 5.2%, work simply isn’t paying enough.

“Inflation is merciless and in real terms pay fell by 2.8%, a slower rate than the previous month but it just shows the strain on pay packets and reinforces the differences between the public and private sector.

“There’s little doubt the current cost of living crisis is focussing minds and people are looking for any means possible to make ends meet and for a record number of over 65’s that’s meant a return to the workplace. Most are choosing to work part-time and many are self-employed, helping with childcare, working in arts, education, and recreation.

“There are big questions about what’s going to happen to the jobs market over the next six to twelve months. How will continued difficulties finding staff impact businesses ability to grow? How will demand for higher wages impact their ability to invest in future growth? And will recession stop growth in its tracks turning the tide on the labour market as companies switch from recruitment to redundancy?”

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