22 January 2019
The ONS’s latest labour market data paints a familiar picture – employment is at a record high and unemployment remains low.
The employment rate returns to a record high, with employment growth picking up from a mid-year lull and matching the relatively strong rates seen over most of 2018.
The unemployment rate remained broadly unchanged, standing at 4.0%. And a faster rise in vacancies means that now there is the smallest number of job seekers per vacancy (1.6) since records began.
A record employment rate and an increasing difficulty filling jobs are further signs that the labour market is tightening.
The increasing tightness in the labour market seems to be fuelling pay growth, which edged higher once again. But while pay rose at the quickest pace in a decade, growth was still weak relative to pre-crisis norms.
The route to stronger pay growth remains a sustained increase in productivity growth, not the fits and starts we’ve seen. Thus, the enduring weakness of productivity growth through to the third quarter of 2018 is concerning and underlines the need for the government to work with business to encourage more investment in new technologies, skills and infrastructure.
Across the UK, most regions and nations have seen an increase in employment, while unemployment presents a mixed picture.