Market Insight – UK Jobs Data Preview

The United Kingdom releases a slew of jobs data tomorrow in a time when the UK employment situation is surprisingly robust despite the dire state of the UK economy.

Recruiters have been enjoying robust business and hire demand while the UK unemployment rate has stayed very low. Forecasts are for jobless claim to remain low and unemployment to remain low also.

Last month the number of people in work in the UK dropped by 109K in the three months to August, the biggest decline since January last year and compared to market expectations of a 155,000 fall.

The number of self-employed workers fell in the first year of the coronavirus pandemic and has remained low, although the number has increased during the latest three-month period for both the full-time and part-time self-employed.

Also, the jobless rate in the UK fell to 3.5% in the three months to August of 2022, a new low since 1974, and below 3.6% in the previous period and market forecasts of 3.6%.

The economic inactivity rate increased by 0.6 percentage points or by 252K to 21.7%, the most since records began in 1971, either because people were sick or because they were students.

Meanwhile, job vacancies fell by 46K to 1,246,000, the largest fall since June to August 2020 although the number of vacancies remains at historically high levels. The number of unemployed people per vacancy fell to a record low of 0.9.

And there was also an increase in people unemployed between 6 and 12 months while there were decreases for short-term (up to 6 months) and long-term unemployment.

Average weekly earnings including bonuses in the UK increased by 6.0% year-on-year to GBP 617 in the three months to August of 2022, above a 5.5% gain in the three months to July.

This was also the highest reading since the three months to May, topping market forecasts of 5.9%. Regular pay which excludes bonus payment went up 5.4%, after a 5.2% rise in the previous period, exceeding expectations of 5.3%.

Adjusted for inflation, total pay fell 2.4% while regular pay dropped 2.9%, amid a squeeze in UK living standards. Considering the August month only, average real earnings excluding bonuses were 2.8% lower YoY, the tenth straight month of fall and after a 3.0% decline in July.