KPMG comments on today’s labour market figures - July 2022

“Labour market approaching a turning point as economy cools” says Yael Selfin, Chief Economist at KPMG UK.

“Labour market approaching a turning point as economy cools” says Yael Selfin, Chief Econo

“While the labour market remains tight, there are signs that a slowing economy could see companies adjust their hiring plans in light of weakening demand and diminishing margins.

“Meanwhile, a fall in the inactivity rate shows people are returning to the labour market after prolonged absences during the pandemic. Over time, this will help mitigate some of the acute staff shortages which characterised the labour market earlier this year.

“Robust growth in regular pay masks a weakening purchasing power of households as real earnings growth fell for the sixth consecutive month. With a more persistent inflationary outlook, consumers will likely remain under pressure for longer before they can afford a return to their previous spending patterns.

“The headline unemployment rate remained 3.8 percent in the rolling three-month window to May, while the inactivity rate fell to 21.1 percent in this period. Current headwinds could see the rate of unemployment rising to over 4 percent by September this year.”



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KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff.  The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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