September Labour Market Statistics: Comment from the Institute for Employment Studies

IES News

12 Sep 2023

Commenting on today's figures, Tony Wilson, Director at the Institute for Employment Studies said:

“While today’s figures see a welcome return to real pay growth, the jobs data is very weak indeed. Employment has seen its largest quarterly fall since 2020, with both unemployment and economic inactivity rising. This points to two big challenges for government: too many people are outside the labour force entirely, but those that are looking for work are finding it harder to get it. So we need action on both fronts, to help people to start looking for work but also to get much better at helping people find it. Particularly worrying today has been a sharp rise in the number of young people neither in education nor employment, which is now close to 1.1 million or around one in six of all young people. This is the highest figure since the first lockdown in 2020 and is hard to explain or to justify given there are still nearly a million vacancies in the economy.

“This weakening in the labour market also weakens the case for further interest rate rises, although the growing mismatches between people and jobs will likely continue to put upward pressure on pay. So if we want to get inflation down in the long run, we need action at the budget to address this and to help more of those who want to work to get the support that they need to take it up. This should include extending access to employment programmes like Restart for the two million people who are outside the labour force and want to work, as well as reforming the Apprenticeships levy to allow more flexible, shorter-term help to support reskilling.”

Read our detailed briefing note here