May Labour Market Statistics: Comment from the Institute for Employment Studies
16 May 2023
Commenting on today's figures, Tony Wilson, Director at the Institute for Employment Studies said:
"The stand-out figure in today’s data is another sharp increase in the number of people off work with long-term health conditions, up by nearly a hundred thousand in the last quarter to over 2.5 million people. This is now comfortably the largest number of people out of the labour market due to long-term health problems that we have ever seen. This is being masked to some extent by a fall in overall economic inactivity, which is mainly being driven by big falls in the number of students, with student numbers almost back to where they were before the pandemic. So it looks like those people closer to work are still moving into jobs, while those more disadvantaged in the labour market are getting left behind.
Figures on employment are more mixed, with vacancies edging down again slightly and the latest payroll data from HMRC showing its first fall in over two years. However, this experimental payroll data can be subject to significant revisions, while vacancies remain incredibly high by historic standards. Pay growth is also holding up, in both the private and public sectors now. So it is too early to say whether the labour market is weakening, but our assessment is that there is still very strong demand and that it’s more likely a lack of supply than a lack of demand that is holding back growth.
Given this, there’s still a lot more that we can do to help people out of work to prepare for work and to get back in, and particularly those with long-term health conditions. The announcements at the Budget on this were a start, but will largely only replace provision that is already in place and due to end next year. So we need to see more focus in our existing employment services like Jobcentre Plus and the Restart Scheme on helping these groups, and more investment in the sorts of specialist employment support, occupational health and workplace practices that will make a difference.”
Read the detailed IES Labour Market Statistics briefing note here.