Economics: Labour market update from ONS

Date : 20 April 2021

As economic recovery continues, redundancy is falling – in January 2021, around 204,000 people in the UK were made redundant, which is about double the “usual” rate but still well below the peak hit in October.

This data is encouraging but, for many employers – and, therefore, many workers – there are further challenges ahead, as government support for businesses is gradually wound-up. Risk of job loss will remain.

Around 607,000 job vacancies were outstanding in February 2021.

This is promising and may be another sign of economic improvement, but many of the unfilled posts referred to are in the public sector - especially in healthcare – and in provision of utilities.

Those who have lost their jobs in the recent downturn may have difficulty in moving into functions where labour demand is high.

Recent research from CIPD / Adecco suggests that healthcare roles in particular are proving hard for employers to fill, due to the special skills and qualifications needed.

Unemployment remained stable in January at 4.9% for the population as a whole, amounting to 1,674,000 people.

Young adults remain especially vulnerable to unemployment, however. The unemployment rate for 18-24 year olds in January was 12.8% or 476,000.

This means that 18-24 year olds made up 28% of unemployed people in the UK, despite making up only 8% of the total UK population.

Data on pay suggests that pay growth continues, but this data is potentially misleading due to composition of the samples used.

Forecasts from OBR suggest that, in the long term, growth in average weekly earnings will return to the previous – fairly sedate - trend rate once the Coronavirus emergency is over.

However, it is likely that individual experiences will vary widely and that inflation will erode away the value of any pay gains, as demand drives prices up.

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