The economy may have narrowly escaped a recession by returning to weak growth in the third quarter but there are signs of similar fragility in the jobs market as it slowly succumbs to sliding business confidence.
Employment remains high by historical standards but the job creation boom is gradually running out of steam and the pace of wage growth has slowed. The employment rate appears to have plateaued in recent months after several years of strong growth, while the average worker’s paypacket is now growing at 3.6% a year. That is less than the brisk 3.9% recorded during the summer, although still more than double the rate of consumer inflation. That is good news for those already in work despite the fact that average weekly earnings have still not surpassed the pre-recession peak achieved in 2008.
For jobseekers, the data is slightly less encouraging. While there are still a lot of job opportunities, the total number of vacancies has fallen to approximately 800,000, its lowest level for two years.
For employers, this jobs report is less a warning sign and more an expression of their gradually weakening confidence. With the unemployment rate remaining near its 45-year-low, employers in many sectors are still in competition for hires. But economic growth, while still in positive territory, is fragile. And at least some employers are showing themselves increasingly wary of hiring new staff while the business outlook remains so unclear.
