Slowing economy begins to impact UK’s strong labour market 12 November 2019 Underneath stable headlines of near record employment, several worrying indicators show that our slowing economy may now be affecting our labour market, the Resolution Foundation said today (Tuesday) in response to the latest ONS labour market statistics. Overall the UK’s labour market remains strong with employment, unemployment and inactivity rates stable over the course of 2019. However, the big improvements of the past decade have come to a halt. The Foundation highlights worrying signs emerging in recent months, as GDP growth has slowed to the lowest annual rate since 2010. These include the highest quarterly fall in employment since May 2015, due primarily to a 93,000 fall in female employment, which has until recently been the driver of the UK’s job boom. This is the largest drop in female employment since records began in 1992. Other signs of a slowing labour market include a slight rise in youth unemployment (up from 11 to 12 per cent over the past year) and weaker jobs growth in areas such as Wales and Yorkshire and the Humber, which already have below average employment levels. The UK has also seen a ninth consecutive month of falling job vacancies. Pay growth is also stalling. In the three months to September 2019, growth was down on the previous month. Average regular weekly pay grew by 3.6 per cent, down from 3.8 per cent, while real regular pay growth was 1.7 per cent, down from 1.9 per cent. Nye Cominetti, Economic Analyst at the Resolution Foundation said: “Until now the jobs market has seemed immune to wider economic conditions, and the uncertainty that is dragging on UK growth. But falling employment, fewer vacancies and slowing pay growth suggest this may no longer be the case. “The recent drop in female employment and slight uptick in youth unemployment are worrying symptoms, as these groups are often first to feel the effects of falling employment. “Today’s signals should give all political parties on the campaign trail pause for thought. This year may have seen record levels of employment, but the next government needs to be prepared for the consequences of a rockier road ahead.”
