Labour market statistics suggest a modest but continued growth in the labour market
The number of people unemployed fell by 57,000, in the three months to the end of May however new OECD report also suggests unemployment will remain high in the UK into 2014.
Responding to the latest ONS labour market statistics, the OECD Employment Outlook and the launch of traineeships for 16-24 year olds, Mark Beatson, chief economist at the CIPD, comments: “Today’s labour market statistics appear consistent with the trend in recent months towards a modest but continued expansion of the labour market. Employment has increased marginally since the previous quarter and unemployment is down again, with the growth in full-time jobs rather than part-time jobs. Interestingly, the non Labour Force Survey based measures of labour market activity suggest a stronger rate of activity with a fall of 21,000 in numbers claiming Job Seekers’ Allowance and an increase of 24,000 in the number of job vacancies.
“However, the latest figures also show the squeeze on real earnings continues: average pay excluding bonuses increased by just 1% at a time when the government’s target measure of inflation increased by 2.7%. Using this measure of inflation, average real earnings have fallen by 8% since their peak in January 2009. This will have helped to keep unemployment down but may be a reason why consumer confidence remains subdued.”
“Today’s Employment Outlook report issued by the OECD is a reminder that reducing unemployment will be a long, hard slog for most OECD countries, UK unemployment is projected to remain around its present rate into next year. The OECD report also highlights the high levels of youth unemployment and the increasing numbers of long-term unemployed in the UK as areas for concern. Clearly, stronger economic growth would increase labour demand and improve job prospects for the unemployed — but it is likely to also require continued and effective support for jobseekers and a commitment from employers to invest now in developing their workforces for the future. Today’s announcement by the Skills Minister of the publication of a framework for delivery of traineeships for 16-19 year olds is therefore a welcome development if it means that fewer young people fall through the gaps in the system and more find their way into high quality apprenticeships and continued education”.
Richard Smith, group managing director at job site Reed, told HR magazine he expects to the drop in unemployment to continue over the next few months.
“I think confidence is starting to return to the jobs market and I think this is down to workers feeling more satisfied in their role,” said Smith. “The main reason for this could be put down to workers feeling an increase in job security.”
This feeling has also been backed up by the rise in employees switching jobs, feeling more confident to go up the career ladder or side-stepping, there has also seen an increase in people choosing to dedicate themselves to a new and diverse role, which is a pointer again to growing job market confidence.