Interactive Investor

Job vacancies hit record high amid Covid and Brexit staff shortages

12th October 2021 14:40

Myron Jobson from interactive investor

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interactive investor comments on latest ONS employment figures.

The Office for National Statistics has today released its latest earnings and employment figures.

Key points:

  • 207,000 more people were in payrolled employment in September 2021 compared with August 2021.
  • Early estimates for September 2021 indicate that median monthly pay increased by 5.2% compared with September 2020 and increased by 7.5% when compared with February 2020.
  • The number of job vacancies in July to September 2021 was a record high of 1,102,000, an increase of 318,000 from its pre-pandemic (January to March 2020) level; this was the second consecutive month that the three-month average has risen over one million.
  • Estimates for June to August 2021 show the employment rate increased by 0.5 percentage points on the quarter, to 75.3%. and the unemployment rate decreased by 0.4 percentage points, to 4.5%.
  • The economic inactivity rate is down 0.2 percentage points on the previous quarter, to 21.1%.

Myron Jobson, Personal Finance Campaigner, interactive investor, says: “On face value, August’s figures suggest the job market is recovering well from the Covid malaise, with employment and wages on the up and unemployment moving in the opposite direction. However, this doesn’t tell full story. A mismatch between skills supply and demand is underpinning employers’ inability to fill their vacancies – most notable HGV drivers – resulting in gaps on shelves as well as the lack of waiting staff at restaurants many have experienced in recent history.

“Vacancies have reached a record high, at over 1.1 million, indicating that many enterprises are finding it difficult to attract talent to help them return to business as usual. The competition for staff is frenzied in some sectors, forcing some employers to raise wages to attract talent – but many businesses simply do not have a pot of money to compete. The hope is those who found themselves without a job following the end of the furlough scheme will help to fill vacant roles, but this remains to be seen.”

Victoria Scholar, Head of Investment, interactive investor, says: “There are fewer than 1.5 unemployed per vacancy for the first time in 40 years, suggesting the labour market is extremely tight. Job vacancies hit a record high of over 1.1 million in September, matching or exceeding pre-pandemic levels across all sectors amid staff shortages as a result of Brexit and Covid-19.

“The jobless rate is at a fresh one-year low with a drop in the rate of economic inactivity and a fall in redundancies. The latest labour market figures pave the way for an imminent interest rate rise from the Bank of England with markets pricing in around a two-thirds chance of a hike before year-end amid rising commodity prices and a strengthening employment picture.”

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