The racing pace of the jobs market has ground to a halt. For the second month in a row, the number of people in work has fallen in the most recent quarter, and the growth in pay has slowed.
It’s a worry for students expecting their A level results tomorrow, news which could dictate their future careers. They will be entering the jobs market at an unsettling time. On the one hand, employment is only a fraction down from record highs – it would seem to be a fantastic time to be looking for work. On the other hand, we seem to be at an inflexion point: employers report they have vacancies but they’re finding it hard to fill them because many young people don’t have the right skills. A levels are a great preparation for university but not necessarily the best grounding for employment.
In bald numbers, the unemployment rate was the same as the previous month at 5.6 per cent but 63,000 fewer people had jobs in the most recent three month period. The average rate of growth in pay dropped to 2.4 per cent, down from 3.2 per cent, much lower than economists had expected (2.8 per cent) so taking even more heat out of a key measure being watched by policymakers at the Bank of England when deciding when to put up interest rates. In fact, the overall figure for wages is much lower than the Bank’s own forecasts so it really does push back the likely timing of a rate rise.
However, there is good news within all this. Inflation has been bumping around zero per cent in recent months so even a slower rate of pay increases is being felt in full by those lucky enough to have them.
Also, looking at the single month numbers, 53,000 jobs were actually added (the 63,000 loss for the quarter is an average which includes losses of 71,000 and 45,000 in the previous two months) so employers may be starting to hire again, especially after the uncertainty of the election has lifted. That may be reflected in the number of people claiming unemployment benefits (a more up-to-date statistic) which fell by 4,900 people, to 792,400 in July.
So if your A levels are due out tomorrow and you’re thinking this may be the time to look for a job … you may be right.