Saturday, November 27, 2021

Unemployment rate drops to 4.3%

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Employers put 160,000 people on their payrolls in October as the UK labor market allayed fears that the end of the vacation regime would lead to a sharp spike in unemployment.

The additional staff increased the total number of paid employees to 29.3 million in October, the Bureau of National Statistics reported.

The official unemployment rate from July to September – which includes data from before the end of the vacation regime – fell to 4.3 percent, a decrease of 0.5 percentage points from April to June. It remains 0.3 percentage points above its pre-pandemic level.

On a quarterly basis, a record number of people flowed from unemployment into employment, underscoring the success of the vacation program officially known as the Coronavirus Job Maintenance Program. The number of job vacancies rose 388,000 to a new record high of 1,172,000 when coronavirus restrictions were lifted.

More people are also quitting, as the figures show. The total number of job-to-job changes rose to a record high of 979,000, largely driven by layoffs rather than layoffs.

The numbers are welcomed by workers but add to the problems for employers who are struggling to recruit in the face of an ongoing labor shortage that has hit businesses such as retailers, hospitality and transportation companies.

Sam Beckett, ONS head of business statistics, said: “It could be a few months for the full effects of vacation to end as people who lost their jobs in late September may still be receiving severance payments.

“However, the early estimate from October shows that the number of employees has risen sharply over the course of the month and is well above the level before the pandemic.”

She added: “There is also no sign of an increase in layoffs and companies tell us that only a very small fraction of their previously leave of absence have been made redundant. In addition, vacancies reached a new record high. “

Overall, the employment rate in the UK was estimated at 75.4 percent between July and September – 1.1 percentage points lower than before the coronavirus pandemic but 0.4 percentage points higher than the previous quarter (April to June 2021).

This was largely driven by an increase in economic inactivity – unemployed and unemployed – which is 0.9 percentage points higher than before the pandemic. More men than women switched from gainful employment to inactivity. In both men and women, inactivity increased in the first few months of the pandemic and is now beginning to reverse, the ONS said.

Young people, who felt their job prospects were more compromised than other groups, saw an improvement over the last quarter. However, the employment rate among 16 to 14 year olds will remain 2.5 percent lower than between December 2019 and February 2020.

The number of part-time workers, which had declined sharply last year, picked up in the last quarter, but remains 5.5 percentage points lower than before the pandemic.

The growth in regular wages (excluding bonuses) for employees from July to September 2021 was 4.9 percent. Adjusted for inflation and excluding bonuses, real wages rose by 3.1 percent in one year. However, the ONS warned the numbers would be flattered when compared to a huge slump in profits at the height of the pandemic last year.

The government welcomed the numbers. Labor Secretary Mims Davies said: “With over 100,000 young people getting jobs through the Kickstart program, more people on payroll in all parts of the country this quarter, and unemployment falling further, it is clear that our plan for jobs functions.”

The UK economy remains sluggish compared to other wealthy G7 countries. The US economy has already passed its pre-pandemic levels despite being hit hard by Covid-19. Its recovery has been attributed in part to a $ 1.9 trillion program of government spending to stimulate the economy. France and Germany have also recovered more strongly than the UK.

Laith Khalaf, head of investment research at AJ Bell, warned that labor shortages could further hamper economic recovery.

“As we approach Christmas it is extremely positive news that unemployment is so low,” he said

“For employers, it is less good news that vacancies still remain at record levels, which shows that many companies are still struggling to attract employees as the busy holidays approach.

“The growth in job vacancies has slowed slightly, but tens of thousands more vacancies are being advertised than filled, suggesting that the economy is currently trying to run at full speed without enough fuel in the tank.”

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