The UK unemployment rate fell to 4.7% in the three months to August, down from 4.9% in July, according to the Office for National Statistics (ONS). This is the lowest unemployment rate in over a year. The number of unemployed people decreased by 47,000 to 1.712 million during this time. Meanwhile, job vacancies dropped by 21,000 to 691,000, the lowest level since early 2021.
Key Details
The drop in vacancies is mainly due to smaller businesses. These businesses are facing higher labour costs from increased National Insurance contributions and a rise in the minimum wage. David Freeman, ONS deputy director of labour market statistics, noted that the labour market remains mostly flat. However, there are signs of a slight increase in the employment rate. Average earnings, excluding bonuses, rose by 3.7%. This translates to a 0.8% increase in real terms when adjusted for inflation.
Background
Despite the good news on unemployment, the drop in vacancies has raised concerns about a possible 'jobs drought.' The ONS reported that the number of vacancies has seen its largest fall since the start of the year. There have been significant reductions in the construction sector. Stephen Evans, chief executive at the Learning and Work Institute, commented on the flat nature of the labour market. He emphasized the need for more job creation.
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The decline in job vacancies could signal challenges for sectors that rely on hiring, especially small businesses. This trend may lead to slower wage growth and affect consumer spending. Investors will pay attention to the upcoming budget announcement, which could influence employment policies and economic support measures.
Based on reporting by: bbc.co.uk, standard.co.uk