Official labour market statistics show that the unemployment rate fell by 51,000 between June and August to 1.39 million, a figure down 105,000 from a year earlier; despite this good news professional body the CIPD argue that the jobs market is at a standstill.
The Office of National Statistics latest labour market report looks to be good news on the surface. There has been a measured growth in employment up by 10,000 over the quarter, the claimant count for Jobseeker’s Allowance benefit fell by 200 since September and the unemployment rate is down.
Dr John Philpott, chief economist at the Chartered Institute of Personnel and Development (CIPD), however, says the figures hide a weaker demand for staff and a cooling labour market.
Commenting on the findings Dr Philpott said:
“Today’s official figures confirm that the UK job market is now at a virtual standstill. The flood of new jobs enjoyed in recent years has slowed to a trickle. And with the number of economically inactive people of working age at a record level, the government is still a long way short of meeting its goal of ‘full employment in an opportunity society’.
“Despite continued good news on measured unemployment hardly any net new jobs have been created this year and the employment rate for people of working age has fallen to 74.7%. The slowdown is even more marked in terms of hours worked – a further fall of 4.2 million hours per week in the latest quarter.”
Increased vacancies and falling redundancy rates further mask the state of the jobs market, according to Philpott.
“CIPD survey evidence on recruitment difficulties also suggests that many jobless people are either unable or unwilling to fill available vacancies. One in three employers who were looking to recruit staff in the summer months failed to do so because of a total lack of applicants.
“A smaller active labour pool could itself help explain why employment has been growing more slowly if employers are struggling to find staff. Where this occurs, part of the demand for labour manifests itself in a higher stock of vacancies rather than higher employment, which is precisely what has been happening of late,” said Philpott.
