[Economics] More people looking for work as vacancies fall

[Mr.Hacker]

 

 

The number of people looking for work has risen as job vacancies fall suggesting that the uncertain economic outlook is hitting employment.

About 220,000 more people were seeking work between December and February than in the three months before.

Unemployment rose slightly and job vacancies fell for the ninth time in a row, official figures suggest.

However, the figures also showed a rise in the employment rate as more people returned to the jobs market.

Overall, UK economic growth has been flat since spring last year, with the effects of high energy prices and rising interest rates taking their toll, along with strikes in several sectors.

Figures from the Insolvency Service on Tuesday also showed a sharp rise in the number of firms going bust in March. There were 2,457 business insolvencies last month, up from 1,784 in February.

Inflation - the rate at which prices rise - has been running at more than 10%, remaining close to 40-year highs, and the latest earnings figures showed that pay increases continue to lag behind rising prices.

Annual growth in regular pay, which excludes bonuses, was 6.6% between December and February, the Office for National Statistics (ONS) said.

However, when taking inflation into account, regular pay fell by 2.3%.

The ONS figures showed that the employment rate edged up to 75.8% in the three months to February. In the same period, the unemployment rate rose to 3.8%, up from 3.7% in the previous three months.

Job vacancies fell for the ninth time in a row with companies blaming economic pressures for holding back on hiring new staff.
From January to the end of March, the number of vacancies fell by 47,000 from the previous quarter to 1,105,000, although the ONS noted vacancy numbers remained at "very high levels".

Michael Stull, the managing director of employment agency ManpowerGroup, told the BBC's Today programme: "We are starting to see a pullback in demand from employers. However, we're still in a strong position."

"We're seeing more people coming back into the workforce," he added, noting that more over-50s and younger people were returning to the jobs market.
Daniel Ashville Louisy, director of construction firm Ashville Aggregates, said that despite high demand at the moment, many firms were starting to put construction projects on hold due to uncertainty in the economy.

He also said that profits were being squeezed because wages have risen so much.

"We have labourers earning the money that plumbers and carpenters were earning like, two and a half, three years ago," he said.

"But everyone wants the job to be cheaper because they have no certainty... so we don't have the money in the job to bring new people on board at the higher wage bracket."
Reacting to the latest figures, Chancellor Jeremy Hunt said: "While unemployment remains close to historic lows, rising prices continue to eat into pay cheques which is why halving inflation this year is one of our top economic priorities."

However, shadow chancellor Rachel Reeves said the government was holding the UK back. "Their lack of ambition for Britain is leaving real wages down, families worse off, hundreds of thousands fewer people in work and our economy lagging".

Liberal Democrat Treasury spokesperson Sarah Olney said: "The Conservative party's gross mismanagement of the British economy has led to inflation rising and growth plummeting."
You always have to be careful about placing too much emphasis on one set of figures, but the rate of pay rises across the economy has surprised economists on the upside.

We may or may not be about to go through a full-blown recession or a more modest downturn.

However, so far the challenges facing the economy have only had a modest effect on unemployment, smudging only slightly the clear picture that it's a good time to be looking for work.

At 6.9%, the average pay rise in the private sector is down from a peak, but only slightly.

It's still one of the biggest rises in average earnings anyone has seen for most of the past 20 years.

Even in the public sector, employers who have a free hand are paying more to try to overcome the ongoing recruitment crisis - with wages up 5.3% in the year to February.

Few will need reminding, though, that against double-digit inflation that's still one of the biggest real-terms pay cuts both private and public sector workers have had to endure since the 1930s.
 

https://www.bbc.com/news/business-65301742