KPMG comments on today’s labour market figures - March 2022
“Staff shortages could be a sign of a lasting problem” says Yael Selfin, Chief Economist at KPMG UK.
“Staff shortages could be a sign of a lasting problem” says Yael Selfin, Chief Economist
“The UK labour market continued to tighten at the start of 2022, with the unemployment rate falling to 3.9% and the vacancy rate reaching 4.4%. We expect unemployment to remain very low in the coming months, with a record number of job moves leading the reconfiguration of the labour market post-Covid.
“Private sector regular pay growth continued to run at around 4%, reflecting a combination of strong demand for staff and widely reported candidate shortages. While this would usually be a sign of a healthy expansion, the fall in real disposable incomes due to rising taxes and spiralling utility bills will be a bitter pill to swallow for the majority of working households.
“We are starting to see the limits to which vacancies can be filled by those re-entering the labour market. While many workers left it to take up studies during Covid, this trend has now reversed back to pre-pandemic levels. In addition, the proportion of those who are not seeking employment but would still like a job has remained at its lowest level on record, particularly for women. That could lead to enduring staff shortages if demand remains strong.”
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