Job vacancies have hit a record high as the UK’s labour market continues to rebound, according to the latest figures.
The number of vacancies hit 953,000 in the three months to July, the Office for National Statistics (ONS) said.
The unemployment rate fell to 4.7% in the three months to June, while the annual growth in average pay was 7.4%.
However, they urged caution in reading too much into the rise in wages.
While the rise in average pay hasn’t been that high for a long time, it also compares to last year when millions of people were on furlough and were not being paid their full wage.
Rebound
The ONS said payrolls rose by 182,000 between June and July, although at 28.9 million it is still 201,000 lower than before the pandemic struck.
The number of people on payroll has now grown over half a million in the past three months, regaining about four-fifths of the fall seen at the start of the pandemic.
Arts, leisure and foodservice firms were among those making a big contribution to the surge in job openings.
There was no sign of redundancies starting to pick up in the survey data ahead of the furlough scheme beginning to wind down, and Insolvency Service figures for July suggest the same.
Chancellor Rishi Sunak said: “I know there could still be bumps in the road but the data is promising – there are now more employees on payrolls than at any point since March 2020 and the number of people on furlough is the lowest since the scheme launched.”
The furlough scheme is set to finish at the end of September.
The jobs data should calm fears that the ending of government support measures could send unemployment higher.
The figures add weight to the view that there won’t be a big shake-out in employment once the furlough scheme expires at the end of September.
It was encouraging that PAYE employment in July rose by 182,000 month-on-month and the claimant count fell by 7,800 month-on-month leaving the claimant count rate unchanged at 5.7%.
These figures show a jobs market in robust recovery as the economy reopens and the furlough scheme starts to be phased out. Employment is up on all measures, unemployment down and experimental numbers in July showed there are over one million vacancies.
There are record numbers of unfilled jobs, in sectors such as entertainment, accommodation and food, underlining the concerns of industry on labour shortages.
The number of payroll jobs reported on the HMRC systems is very close to its pre-pandemic level at 28.9 million now compared with 29 million in March 2020. That number is up 576,000 over the past year and 182,000 up in July alone.
The growth in that varies considerably between regions, with holiday areas such as Cornwall and West Wales showing annual rates of growth of around 5%, far above the rates in major cities.
Analysts warn that the unemployment figures would rise as the furlough scheme continued to be phased out. But the peak unemployment rate is on course to be significantly lower than had been expected last year.
The labour market outperformed expectations as the economy accelerated with the relaxation of Covid-related restrictions.
Changes to the business environment, such as the fall in business travel and the rise in online commerce, increased the need for skills, from IT specialists to hauliers, while at the same time caused an unusually high level of mismatch in the UK’s labour market.
