KPMG comments on today’s labour market figures - May 2022
“No signs yet of cooling in a tight labour market” says Yael Selfin, Chief Economist at KPMG UK.
“No signs yet of cooling in a tight labour market” says Yael Selfin,
“Labour shortages have become a persistent feature since the pandemic, and a key limiting factor to business growth. The number of vacancies remained above the one million mark for the ninth month in a row as demand for labour continues to outstrip the number of available candidates.
“Real wages, which are estimated to have fallen by 1.2% in the 12 months to March, are contributing to the squeeze on household incomes. The pace of nominal wage growth remained close to 4%, as wages struggle to keep pace with rising inflation, suggesting that inflation is not yet embedded in wage bargaining expectations. Although bonuses in some sectors were high, compensating for the loss in purchasing power for some employees.
“Unemployment fell to 3.7% in the three months to March 2022, while overall employment rose to 75.7%, 0.9 percentage points below pre-pandemic levels. We expect the labour market to remain tight over the summer months, however a slowdown in GDP growth could see the unemployment rate climb to 4% by the end of the year.”
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