The number of persons not seeking employment due to a chronic condition has reached an all-time high, according to the most recent official statistics.
The decline in job seekers has contributed to the lowest jobless rate in over half a century.
In the three months leading up to August, the unemployment rate fell to 3.5%, according to the Office of National Statistics (ONS).
The number of job openings decreased once more, but the level remains high with many companies struggling to recruit.
However, the compression in wages persists, with regular salary increases not keeping pace with the rising cost of living.
David Freeman, head of labor market and household data at the Office for National Statistics, stated that the number of people who are neither working nor seeking work has continued to climb over the previous several months.
The economic inactivity rate, which measures the proportion of adults aged 16 to 64 who are not actively seeking employment, grew to 21.7% from June to August, according to the ONS. The number of inactive individuals due to chronic illness reached a record high of approximately 2.5 million.
Mr. Freeman continued, “While the number of job openings remains high following a lengthy period of fast expansion, it has recently declined slightly, with several companies informing us that they have slowed recruitment in response to various economic challenges.
In the three months leading up to September, the expected number of job openings decreased by 46,000 to 1,246,000, the greatest decrease since mid-2020, during the Covid epidemic.
Ruth Gregory of Capital Economics stated that while there were “suggestions that the labor market is cooling from the red-hot circumstances of the past several months,” the labor supply shortage was keeping the labor market extraordinarily tight.
She continued, “This will maintain considerable pressure on the Bank of England to aggressively raise interest rates in the coming months.”
“Recruitment issues are restricting our expansion”
PMG Services, a Bristol-based waste management organization, continues to struggle to find sufficient personnel. It employs 50 employees, however, a variety of positions are vacant.
PMG’s Clare McGuinness explains, “We receive a lot of interested individuals, we provide interviews, and then we get a lot of no-shows, which is quite upsetting and wastes so much time.”
She adds, “Some folks who are promised jobs don’t even show up for work. It’s a huge difficulty.”
The corporation has also increased compensation to aid in recruitment and retaining current employees.
She claims that the continuing vacancies make it difficult for the business to take on further work.
We’ve become extremely lean and boosted our efficiencies, but there’s only so much we can accomplish, which severely restricts our growth potential.
The ONS data revealed that although wages were increasing rapidly, they were not keeping pace with inflation.
Regular pay, which includes incentives, increased at an annual rate of 5.4% from June to August, according to the ONS. This is the highest growth rate outside of the coronavirus pandemic.
However, inflation – the rate at which prices increase – is nearing a 40-year high of 9.9%.
Taking inflation into account, the value of regular pay decreased by 2.9% in the three months leading up to August, according to the ONS.
The Chancellor, Kwasi Kwarteng, stated in response to the data that “the fundamentals of the British economy remain resilient.”
“Our ambitious Growth Plan will generate sustainable long-term growth, resulting in higher earnings and improved living conditions for all, and we are cutting taxes so that people can keep more of what they earn,” he continued.
