The United Kingdom's job market is showing signs of cooling, with the number of available vacancies falling to its lowest point in five years, according to the Office for National Statistics (ONS). This downturn is particularly pronounced in sectors such as hospitality and retail, which have reported significant decreases in job openings.
The ONS data reveals that the unemployment rate saw a slight increase, rising to 5% in the three months concluding in March, up from 4.9% in the preceding three-month period. Average regular earnings growth also experienced a dip, standing at 3.4% for the first quarter of the year. After adjusting for inflation, this growth represented a 0.3% increase.
Liz McKeown, director of economic statistics at the ONS, characterized the latest figures as indicative of a "soft" labour market. She noted that vacancies have reached their lowest level in half a decade, and unemployment has risen compared to the previous year. Preliminary estimates from the ONS suggest a reduction of 28,000 job openings between February and April, marking a 3.9% decrease. This brings the total number of vacancies to 705,000, the lowest figure recorded since April 2021.
McKeown further elaborated on the trends, stating, "Lower-paying sectors such as hospitality and retail have seen some of the largest falls in vacancies and payroll numbers, both in recent months and over the last year." This highlights a contraction in hiring within these specific industries. The ONS also reported a decline in the number of individuals on company payrolls in April, with payroll employment figures dropping by 100,000 in the last month.
However, McKeown cautioned that these statistics emerge at the beginning of the new tax year. She pointed out that data from this period "carry greater uncertainty and have often seen larger than average upward revisions," suggesting that the reported declines may be subject to adjustments as more comprehensive data becomes available. The overall trend indicates a cooling labour market with fewer job openings and a slight uptick in unemployment.
