Jobs vacancies outnumber unemployment figures for first time on record

The UK employment rate increased by 0.1% to 75.7% over Q1 2022, however the great resignation is still very much in action, with an estimated total of 994,000 workers resigning from their positions for new jobs over the period, according to the Office of National Statistics (ONS).

“There’s been a record number of people moving job over the last quarter as the cost the living squeeze really begins to grab hold of the country suggesting workers are chasing higher pay in an increasingly tight labour market,” said AJ Bell financial analyst Danni Hewson.

Labour Hours Grow

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The latest labour market overview, released today by the ONS, reported an uptick in payrolled employees for April 2022 of 121,000 to 29.5 million, with a rise in total actual weekly hours worked of 14.8 million to 1.04 billion in Q1 compared to the last quarter.

However, the survey added that the hours came in 10.7 million below pre-Covid-19 levels.

Average actual weekly hours remained at similar rates to pre-pandemic records, with part-time worker hours at an all-time high of 16.8 hours per week, suggesting that workers were finding shifts overtime to keep up with the surging cost of living on the back of skyrocketing 7% inflation.

“People are working more hours, part time numbers have jumped up suggesting that calls from some quarters that people need to take on extra jobs to make ends meet is something that’s already happening,” said Hewson.

Unemployment Falls

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Meanwhile, unemployment levels fell 0.3% to 3.7%, representing the lowest level since 1974 and marking the first time since records began that there were fewer unemployed people than job vacancies.

Job vacancies also grew to a record number of 1,295,000, however the rate of vacancy growth continued to slow over the term.

“For the first time since records began there are more vacancies than people out of work, a situation that’s forcing employers to adopt whatever methods they can to tempt workers to jump ship,” said Hewson.

“People power the motor, without them businesses can’t function properly, but businesses are also struggling with rising costs and looking at where those vacancies are still sprouting up it’s the larger companies, those that have deeper pockets which are still hiring whilst the smallest employers are cutting back.”

The ONS further commented that economic inactivity increased by 0.1% to 21.4%, driven by people in the 50-64 year age bracket.

Private Sector Drives Pay Growth

The report confirmed a 7% increase in total pay, with a 4.2% rise in regular pay, excluding bonuses, and a total pay growth of 1.4% while regular pay fell year-on-year by negative 1.2%.

Meanwhile, private sector pay rose at its fastest level since records began in 2001, with a spike of 11.7% year-on-year.

Real total pay rises were reportedly kept afloat by strong bonus payments across the workforce, with bonuses accounting for 9% of private sector pay, marking a growth from 7% over the past year.

“There’s some good news in today’s figures, with record pay growth in the private sector just about keeping wages ahead of inflation, and unemployment continuing to fall to its lowest since 1974,” said IES Director Tony Wilson.

“However this is masking now the tightest labour market that we have seen in at least half a century, with more vacancies than there are unemployed people for the first time ever, and well over a million fewer people in the labour force than on pre-pandemic trends.”

Wilson added that the higher private sector pay was serving to drive the hike in interest rates, in a bid to stamp out surging inflation, which is currently barrelling towards a high of 10% in Q4 2022.

“However rather than trying to dampen demand, we need to be doing far more to boost labour supply, which would support economic growth, raise household incomes and help contain inflation.”

“This needs to be focused on better support for older people, disabled people and those with health conditions. Employers will need to do more too, and make sure that jobs are advertised and designed in ways that are accessible and inclusive for those further from work.”

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