The stability of the employment market was questioned this month after the latest figures from the Office for National Statistics (ONS) revealed that unemployment levels have increased for the second consecutive month. The ONS findings were based on figures for the last quarter, April to June 2015. When these were compared to Quarter 1, January to March 2015, it was discovered that unemployment levels have increased by 25,000 and the number of those employed has decreased by 63,000.
There are now 1.85 million people in the UK unemployed, fuelling concerns that the job boom has ended. However, these figures need to be looked at in context…
There are now 31.03 million people in work, 354,000 more than a year earlier and the employee rate for those aged 16 to 24 has increased by 0.6% to 73.4%. Furthermore, despite unemployment increasing for the last quarter, there are still 221,000 fewer people unemployed than there was a year earlier.
Alongside these impressive annual results, wages have increased by 2.8% in the last year, showing that the economic recovery is still continuing, albeit at a slower pace.
Chris Williamson, chief economist at Markit, puts the latest data from ONS down to skill shortages, declaring that, “Some of the weakening in the employment trend is simply due to companies being unable to find suitable staff as skill shortages become increasingly prevalent.”
Stephen Timms, Labour’s acting shadow work and pensions secretary, said: “The rise in unemployment for a second month in a row is worrying and shows we cannot afford to be complacent about the recovery.“With productivity stagnating, David Cameron and George Osborne must take bolder action to raise jobseekers’ skill levels to get more back into work and help build the high-skilled workforce Britain needs.” It is too soon to say whether the job market is levelling off or simply suffering a seasonal blip. The good news for recruitment professionals is that there were 735,000 job vacancies in the May to July period, 69,000 more than a year earlier. However, with the skill shortages becoming ever prevalent, it is an issue that needs to be addressed before it begins to severely impact upon the labour market.