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Unemployment across the UK has fallen again, as companies continue to add workers to their payrolls despite the end of the furlough scheme in September.
The UK’s jobless rate fell to 4.3% in the three months to September, new data from the Office for National Statistics shows, with the unemployment total dropping by around 152,000 compared to the previous quarter, to 1.448m.
That’s down from 4.5% a month ago, as firms continue to recruit as they recover from the economic shock of Covid-19 — although it’s still higher than before the pandemic.
In September alone, the unemployment rate is estimated to have dropped to just 3.9%.
The furlough job-protection scheme ended on 30th September, and today’s report shows that companies continued to expand their workforces last month.
The ONS estimates that there were 29.3 million employees on company payrolls in October, an increase of 160,000 compared with September.
The ONS says:
It is possible that those made redundant at the end of the furlough scheme will be included in the RTI data for a few further months, while they work out their notice period.
However, responses to our business survey suggest that the numbers made redundant was likely to be a small share of those still on furlough at the end of September 2021.
The number of people in work also rose, by around 247,000 to 32.523m, lifting the employment rate to 75.4%.
The ONS explains:
July to September 2021 estimates show a continuing recovery in the labour market, with a quarterly increase in the employment rate, while the unemployment rate decreased, and the economic inactivity rate was largely unchanged.
Total hours worked increased, following the the relaxation of many coronavirus (COVID-19) restrictions. But the UK economic inactivity rate was estimated at 21.1%, 0.9 percentage points higher than before the pandemic, but largely unchanged on the quarter.
Vacancies at UK companies hit a record level too in August to October, rising to 1,172,000.
That’s an increase of 388,000 from the pre-coronavirus (COVID-19) pandemic January to March 2020 level, with 15 of the 18 industry sectors showing record highs.
Yesterday, the Bank of England governor Andrew Bailey told MPs he was “very uneasy” about the rising cost of living, but wanted to see post-furlough employment data before voting to raise interest rates.
This jobs data could encourage some Bank policymakers to consider a rate rise at the next meeting, in December….
It looks like a quiet start to trading in the markets, with the UK’s FTSE 100 seen a little lower, and European indices near last night’s record highs.
The latest monthly oil market report, updated eurozone growth figures, and new US retail sales figures could give new insights into the economic picture.
Michael Hewson of CMC Markets says:
Retail sales numbers in the US have been quite difficult to predict in recent months, with consumer confidence coming under pressure, due to rising prices in the shops and at the fuel pumps. In September US retail sales came in better than expected, rising 0.7%, against a forecast of -0.2%, while the August numbers were revised up to 0.9%. These better-than-forecasted numbers, along with the continued improvement in the US labour market helped convince the Federal Reserve that the economy was strong enough for it to proceed with its plans to start tapering its monthly asset purchase program starting this month.
It is certainly true that the US consumer has been more resilient than consumer confidence numbers might suggest in recent months. We’ve come off two successive monthly gains since the -1.8% decline seen in July, and today’s October numbers are expected to see another gain of 1.3%. While this might chime with how well a lot of US retailers have been doing this past quarter, it is completely at odds with the direction of recent consumer confidence data, which has been weak.
- 7am GMT: UK unemployment report
- 9am GMT: IEA monthly oil market report
- 10am GMT: Eurozone third-quarter GDP (second estimate)
- 1.30pm GMT: US retail sales for October
- 2.15pm GMT: US industrial production for October
- 3pm GMT: House of Lords economic affairs committee hearing on Central Bank Digital Currencies
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