Labour Market Outlook October 2022

Jobs Outlook

November 17, 2022

Summary

The UK employment rate for July to September 2022 was 75.5%, largely unchanged on the previous quarter and 1.1 percentage points lower than before the coronavirus (COVID-19) pandemic (December 2019 to February 2020). Over the latest three-month period, the number of employees decreased, while self-employed workers increased.

The unemployment rate for July to September 2022 decreased by 0.2 percentage points on the quarter to 3.6%. The number of people unemployed for all duration categories decreased in the latest three-month period.

Neil Carberry, Chief Executive of the REC, said: “The economic and political uncertainty of September and October has caused employers to become more cautious in their approach to hiring than during the frenzy of earlier in the year. Decision-making timelines for permanent hires have extended, for instance. But vacancies and pay are still rising, temporary worker demand is high, and permanent hiring has fallen for the first time in almost two years. Activity, overall, is still well in advance of pre-pandemic levels. We will need to watch how this story develops over months to come, but so far this data suggests heightened employer caution, not a retreat from the market. “It remains the case that firms in many sectors are struggling to hire, as hours worked remain below their pre-pandemic level despite record-low unemployment.

Further sharp decline in supply of permanent workers

The availability of permanent staff across the UK fell for the twenty-first month running in October. The rate of reduction was sharp overall and much quicker than the series trend, despite easing fractionally to the least severe in 18 months. Weaker economic conditions and increased uncertainty over the outlook had led people to become more hesitant to seek out or switch to new roles. A generally low unemployment rate also restricted the pool of available workers.

Job Vacancies

Data from the Office for National Statistics (ONS) showed that overall vacancies across the UK fell slightly in the three months to September but remained high by historical standards. At 1,246,000, the number of open roles was +10.4% higher than that seen over the same period a year ago. However, this marked the softest annual rate of growth since the three months to April 2021. Notably, the number of open positions had actually declined by 46,000 compared to the second quarter.

UK average weekly earnings

Latest data from the Office for National Statistics (ONS) showed that employee earnings (including bonuses) expanded +6.0% compared to a year ago in the three months to August. This was quicker than the rate of growth seen in the three months to July (+5.5%) and among the quickest upturns seen over the past 15 years.

Source: ONS / KPMG UK report on Jobs