UK job market ‘alive and kicking’

interactive investor comments on the latest employment figures.

Commenting, Myron Jobson, Personal Finance Campaigner, interactive investor, says: “The UK job market is very much alive and kicking, and the latest set of healthy labour market figures suggests that the spread of the Omicron Covid variant did little to hinder job creation in December.

“Concerns of a flood of unemployment following the end of the furlough scheme were thankfully unfounded. In fact, the tapering of the job retention scheme before it was fully withdrawn at the end of September can be considered a smooth success, with the unemployment rate dropping to 4.1% - just shy of its pre-pandemic level.

“The UK job market remains robust, but wages continue to lag behind inflation, which threatens to put pressure on household budgets, with higher taxes and further increases in the cost of living still to come.”

“Concerns remain about the quality of employment. What percentage of young people in employment are on temporary contracts for example?

“In addition, there is still a gulf between the demand and supply of roles in some sectors. The HGV driver shortage, for example, hasn’t gone away overnight, while the hospitality sector’s struggles to attract talent is ongoing. Many firms are still struggling to fill vacancies, which threatens to impact businesses’ ability to meet demand for goods and services – adding to supply chain pressures.”

Key points:

• In December 2021, there were 29.5 million employees in the UK: up 184,000 on the revised November 2021 level and up 409,000 on the pre-coronavirus (Covid-19) February 2020 level. 
• The unemployment rate decreased by 0.4 percentage points on the quarter to 4.1%, while the economic inactivity rate increased by 0.2 percentage points to 21.3%.
• The redundancy rate decreased to a record low following the end of the Coronavirus Job Retention Scheme.