The jobs market seems to have run out of steam. Latest ONS data shows the employment rate ticking down to 75.9% and the unemployment rate nudging up to 3.9%. At the same time, we see vacancies continuing to fall gradually from their peak of 861,000 near the start of the year to 813,000 in the three months to September.
In of themselves, most of these changes are relatively minor. It’s too early to tell whether the market is turning, as none of the individual indicators are flashing red. But taken together, they suggest a labour market that is already past its peak and remains at risk of weakening further, as the broader economic outlook remains uncertain.
For the time being, the saving grace is that the pace of wage growth remains brisk at 3.8% excluding bonuses, as employers continue to jostle for recruits. With the ratio of unemployed people per vacancy remaining low at 1.6, the labour market is still tight, meaning competition between employers is forcing many of them to increase wages to lure staff.
The latest figures are still strong compared with the recent past so it’s not all doom and gloom just yet. But data from the last few months suggests that the labour market may be slowing. Watch this space to see how employment figures track the faltering economy in the coming months.