United Kingdom: Labor market indicators are solid in Q3
According to the ONS, in June–August the unemployment rate registered 4.5%, down 0.1 percentage points from the previous rolling quarter. Experimental data for September showed that employment rose by 207,000 from August to a record high. Moreover, job vacancies were also at a record high in the three months to September.
Given the government’s wage support scheme (furlough) ended at the end of September, our panelists expect the unemployment rate to tick up slightly in Q4, as not all those previously supported by the scheme—around one million—are likely to find jobs. Those that do could return to work on fewer hours than before, generating labor market slack not visible by simply observing the headline unemployment rate.
On the latest labor market figures, James Smith, economist at ING, commented:
“Hiring demand is clearly strong, and the rebound in employment in the hardest-hit consumer services sectors continues apace. Wage growth is around pre-virus levels, if ONS estimates of underlying trends are to be believed. And so far, there’s no discernible increase in redundancies ahead of the furlough scheme ending.”