Rolling coverage of today’s economic and financial news
There are some signs of softening in demand for labour in today’s jobs report, warns Ruth Gregory of Capital Economics:
Labour demand was a bit weaker than we expected at the start of the year. Admittedly, LFS employment still increased by 10,000 in the three months to February (consensus forecast: 53,000) up from -13,000 in January. But the single month data showed that in February itself employment fell by 89,000.
In the three months to February, the unemployment rate fell from 3.9% to the rate of 3.8% seen before the pandemic. That further fall reflected a rise in inactivity of 76,000 in the three months to February, driven by more people saying they were retired, looking after family/home or long-term sick.
“Today’s statistics shows a mixed picture for the UK’s labour market recovery with employment stationery at 75.5% and unemployment dropping to 3.8%. However, the vacancy rate remains high at 1.3 million, and economic inactivity continues to rise to 21.4%.
“Crucially, workers and job seekers are being hit by the largest fall in living standards on record as inflation outpaces wage growth. Many are struggling to make ends meet as regular pay growth is at 4% (excluding bonuses) but inflation continues to rise, with the Bank of England predicting inflation will reach 8% in Spring and could rise further later in the year.
