Unemployment has fallen to 4%, down from 4.1%, in the three months to August. Early estimates for payrolled employees in September show a 35,000 decrease, while wage growth slows to 4.9% – the lowest level in two years.
Danni Hewson, AJ Bell head of financial analysis, comments on the latest UK jobs figures:
“There have been a lot of questions asked about the reliability of UK jobs figures, but the biggest question mark comes from the backward-looking nature of the data.
“Businesses have been vocal in the past few weeks about their concerns around this month’s Budget and fears of increased burdens which look likely to fall on their shoulders. Coming in the year of a record bump in the National Living Wage, smouldering inflation and high borrowing costs, an increase in employer National Insurance will be tough for some businesses to factor into their budgets.
“High street retailers and hospitality brands have made no bones about the impact of business rates and small businesses fear the government is only listening to massive corporations ready to write big investment cheques.
“Data showing September’s dip in the number of payrolled employees feels more in tune with business surveys and earnings updates from recruitment companies. There remains a significant number of vacancies even though that number has consistently fallen away from post-pandemic highs.
“The government knows it must deal with the shockingly high number of people who are economically inactive, and hints from the health secretary that some job seekers could be offered weight loss drugs to help them back into the labour market have unsurprisingly grabbed headlines.
“Job creation can only be successful if there is a healthy labour force ready and raring to fill those positions and the ever-present issue of upskilling must be given priority if the economy is to flourish.
“With inflation falling the pressure on bosses to up wage packets has lessened and as those nine rate setters consider whether to cut interest rates next month the further slowing of wage growth is likely to be a check in the cut column.
“But the data is murky at best and a surprising cut to unemployment levels has already pushed market expectation of a November cut back to just over 80%. There’s plenty more data to dig through between now and the Bank of England’s decision, with the Budget undoubtedly one of the biggest X-factors.”
