The UK jobs market now appears to be experiencing a major deceleration. Job openings and employment figures have fallen sharply. According to the latest data from the Office for National Statistics (ONS), vacancies have decreased by 5.8%. This decrease further caps a three-month tally of 718,000 job openings from May to July of this year. This slump is truly a bump in the road, largely characteristic of a larger trend impacting almost every sector throughout the nation.
Vacancies dropped all the way down to 5.9%. Simultaneously, payroll numbers fell by an estimated 8,000 jobs from June to July. Regardless, this decrease foreshadows a dramatic change in the US employment landscape. As a result, between April and June, the total payrolled employees fell. Though the current unemployment rate is 4.7%, a large drop from the late 2000s, this number represents a fatal change in the labor market.
Hospitality and retail sectors experienced the largest decrease in payroll employees. This decrease underscores the difficult, uphill battle these sectors are up against amid changing economic realities. We are representative of the over 30 million people who work on the payrolls of employers all over the UK. Increasingly, automation and artificial intelligence are making enough people fear for their livelihoods.
Liz McKeown, the director of economic statistics at the ONS, commented on the findings, stating that the “latest figures point to a continued cooling of the labour market.” Whatever the cause, this cooling trend is an indication that businesses might be rethinking their hiring plans as the economy continues to face uncertainty.
So even with the drop in vacancies and payroll levels, average wage increases have stayed stuck around 5%. There are less jobs out there today. For those who are employed, wage growth is at least keeping up with inflationary pressures though not by much.
Andrew Sentence, a former Bank of England policymaker, noted that these trends could have implications for future economic policy and employment strategies. As firms make their way through this chilling period, it will be important for policymakers to follow these changes carefully.