19/08/2022
[Optimism vs pessimistic 💭 The two ways of viewing latest UK jobs figures]
Nadhim Zahawi said the unemployment rate of 3.8% has rarely been lower in decades and the chancellor is right about that. Besides, the economy continued to create net new jobs in the three months to June, with employment rising by 160,000 over the quarter. With job vacancies at near-record levels, the labour market looks in good shape to withstand the slightly economy contracted in the three months to June. Ruth Gregory, UK economist at Capital Economics, says “by any metric the labour market is still very tight”.
Economist see things in a pessimistic perspective would point to the slower pace of employment growth, evidence that job vacancies are past their peak and the record gap between regular pay (unadjusted for bonuses) and the rate of inflation. Samuel Tombs, the chief UK economist at Pantheon Macro, says demand for labour is stabilising just as the supply of workers is picking up. The increase in the size of the workforce is being driven by immigration, he notes, with the number of non-UK nationals either working or looking for a job rising by almost 250,000 in the past year. The domestic labour force is also likely to increase as people try to maintain their living standards at a time when cost of living pressures are intensifying.
Ultimately, the labour market data shows where the economy has been but doesn’t necessarily show where it is heading. The Bank of England sees a protracted
Source: The Guardian
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