Wonderful Labour figures but what about inflation?
Latest figures show that Labour Market continues to generate jobs without triggering worries about inflation
Commenting on the latest Labour Market Statistics released today by the Office for National Statistics, CIPD Chief Economist Mark Beatson said: “Figures continue the pattern of recent months, with increased employment and a smaller, although welcome, reduction to unemployment, which is now below 2.5 million.
“These results are in line with the latest CIPD/Success Factors Labour Market Outlook survey, which showed that employers’ recruitment expectations were at their highest level since before the 2008 recession. Other recruitment surveys have been similarly positive. We have also now started to see increasing optimism in more general surveys of business sentiment, such as the purchasing managers’ surveys. This suggests the employment market will remain buoyant in coming months. Jobs growth could even accelerate if the economy is indeed growing more quickly than had been expected. Another measure of employment, the number of workforce jobs, grew by 168,000 in a single quarter between March and June. July and August saw very big falls in the claimant count.
“With regular pay increases, at 1%, well below inflation, employers do not feel they need to raise general pay levels to recruit and retain workers. Hence there will be few immediate concerns about labour demand increasing inflation. However, for this situation to continue, those unemployed and outside the labour market need to be able to compete effectively for the jobs available, especially young people and the long-term unemployed. This means focusing skills training on the areas where jobs are becoming available as well as supporting those out of work to look for jobs. Employers recognise this and many are working hard on their own schemes or through initiatives like the CIPD’s own Learning to Work programme to ensure they are recruiting from the widest talent pools.”
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