18 Oct 2019
Surprise Spike in UK Unemployment as Job Market Slows Down
The number of people in employment dropped by 56,000 during the June-to-August period this year. Forecasts predict this could be an early indicator of a ‘slow down’ in the UK job market.
The size of the drop was a surprise to economists, who had predicted a rise in employment. In fact, the unemployment rate is still close to being lower than it has been for 44 years.
Despite the encouraging figures, the Office for National Statistics (ONS) believes that employment growth has “cooled significantly”. Their data shows that unemployment increased to 1.31 million in the three-month period. A spokesperson for the ONS said:
“The UK labour market showed signs of slowing in the three months to August 2019. The employment rate is still rising year-on-year, but this growth has cooled noticeably in recent months.”
Official figures also showed that the number of available vacancies has fallen to its lowest point since 2017. Economists have suggested that the uncertainty surrounding Brexit may be causing companies to put recruitment on hold.
However, recent research shows that the actual unemployment rate may be higher than these figures suggest. A new study by the Organisation for Economic Co-operation and Development and Centre for Cities has revealed more than 3 million people are missing from official unemployment statistics.
The research suggests that the reason that so many people have fallen of the unemployment radar is that they are reporting themselves as ‘economically inactive’ on government surveys.
This includes a broad spectrum of people who could be willing to work or who have stopped seeking employment. Examples include those with health issues or disabilities, those acting as carers for family members and early retirees.
This ‘hidden joblessness’ appears to be more prevalent in northern areas. The changing nature of the job market has hit these areas harder and, as Centre for Cities Chief Executive Andrew Carter explains, more trouble could be on the horizon:
“People in cities which have struggled to recover from the deindustrialisation of the 20th century could be dealt a second blow as they are ill-equipped to respond to automation.”