Employment above pre-pandemic levels
Figures from the Office for National Statistics (ONS) for August to October 2021 show a continuing recovery in the labour market, with a quarterly increase in the employment rate, while the unemployment rate decreased.
The employment rate for August to October was 75.5%, 1.1 percentage points above pre-pandemic levels. The figures suggest the end of the furlough scheme in September didn’t result in the predicted raft of job losses.
The ONS said the jobless rate fell to 4.2% in the three months to October as employment continued to recover. The figure was up 0.2 percentage points from pre-pandemic levels, but down 0.4 percentage points from the previous quarter.
The data also showed that employers added a record 257,000 staff to their payrolls in November – 424,000 higher than pre-pandemic levels – bolstering early signs that the labour market withstood the end of the wage support. The bulk of the growth in employment came from part-time workers.
Job vacancies hit a record high of 1.219 million in August to October, up 434,500 from before the pandemic. The redundancy rate rose slightly to 3.5 per thousand in August to October, up 0.1 per thousand in the quarter, but below pre-pandemic levels.
The figures create something of a conundrum for the Bank of England. It left the base rate untouched last month, specifically because it was concerned about the risk of unemployment. But these fears have been allayed, and in the interim inflation has hit 4.2% and wage inflation is still running well above 4%. But on the other hand, growing fears about Omicron may impact the economy.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “The Bank of England’s fears of a post-furlough redundancy spike completely failed to materialise. In the three months to October, employment rose above its pre-pandemic levels, the claimant count continued to fall, long-term unemployment dropped for the first time since May last year, and job vacancies hit another record high. Unfortunately, now the bank has something else to worry about.
“We’re not entirely out of the woods just yet, because some of those made redundant at the end of the scheme could be working their notice periods. The number of vacancies is also slowing, and single month figures for October saw the first fall since February. However, the ONS business survey continues to show that only a small proportion of those on furlough at the end of the scheme had been made redundant, so we may not see anything significant in the coming months.”