UK Jobs Market Cools In August, New Data Shows

Hiring slowed down and pay growth eased slightly.

New data from the Office for National Statistics (ONS) has revealed that the UK jobs market cooled in August. The number of job vacancies fell by 22,000 to 1.2 million, the first decline since January 2021. The number of people claiming unemployment benefits also rose by 13,000 to 1.5 million, the first increase since March 2021.

Slower hiring and pay growth

The ONS data shows that the slowdown in the jobs market is being driven by a decrease in hiring activity. The number of new hires fell by 37,000 to 631,000 in August, the lowest level since January 2022. The number of people leaving their jobs also fell, but at a slower pace. This suggests that employers are becoming more reluctant to let go of staff, even as the economy slows.

Pay growth has also eased slightly. The average weekly wage increased by 5.4% in the year to August, down from 5.5% in July. This is still well above the rate of inflation, which is currently at 9.9%. However, it suggests that the cost-of-living crisis is starting to put a squeeze on household finances.

What does this mean for the future of the jobs market?

The ONS data suggests that the UK jobs market is cooling, but it is still too early to say whether this is a temporary slowdown or a more long-term trend. The economic outlook is uncertain, with the war in Ukraine and the cost-of-living crisis continuing to create challenges for businesses and consumers.

However, there are some positive signs in the data. The unemployment rate remains low, and there are still a large number of job vacancies available. This suggests that the labor market is still tight, and that businesses are still struggling to find the staff they need.

Overall, the ONS data provides a mixed picture of the UK jobs market. The slowdown in hiring and pay growth is a concern, but the low unemployment rate and the large number of job vacancies suggest that the market is still tight. It is too early to say whether the cooling in the jobs market is a temporary slowdown or a more long-term trend, but it is something that businesses and policymakers will be watching closely in the months ahead.