IEA - Labour market figures show more of the same, but worrying trends emerge
13 Sep 2022 12:10 PM
Professor Len Shackleton, editorial and research fellow at free market think tank the Institute of Economic Affairs Comments on the ONS labour market data
“Today’s labour market release shows little change from last month, with the unemployment rate again very low, and a large number of vacancies still available – though there has been a drop from the peak levels of the last few months.
“Employment has risen again – with, interestingly, an increase in full-time jobs at the expense of part-time employment. This is usually a good sign, though it is difficult to read the labour market runes in this post-Covid world. The numbers in self-employment are creeping back up again, a welcome sign after the devastation wrought by lockdown and the ill-advised tightening of tax rules.
“It is worrying, though, to see that the numbers economically inactive have risen again. Amongst younger people, this trend has its positive side as much will be the result of rising post-compulsory educational enrolment. For older workers, though, illness is playing a role – perhaps reflecting the problems the NHS is facing at the moment.
“Unsurprisingly, despite sizeable increases in nominal pay, real wages have fallen back again with sharply rising inflation. This situation is likely to worsen in next month’s figures.
“What may be of particular significance is that the gap between the rate of pay increase in the private sector and that in the public sector has increased. This is bound to feed into the pay claims of public sector unions, whose strike threats (muted at the moment because of the period of Royal mourning) will no doubt return with renewed vigour shortly.”