Key Points:
- Job postings remain elevated and resilient to the slowing economy.
- Demand remains particularly strong in lower-paid categories, some of which have seen 7-9% year-on-year growth in nominal advertised pay.
- Inactivity jumps amid rising long-term sickness rates, pushing the unemployment rate even lower even as employment dips.
- Real wages continue to be squeezed by high inflation.
Resilient job postings trend continues
Real-time data from Indeed job postings continue to indicate strong demand for staff. Postings were 43% above the 1 February 2020, pre-pandemic baseline, seasonally adjusted, as of 9 September 2022. Though down from a post-pandemic high of 50% on 31 March, the trend has remained resilient to mounting economic headwinds amid the cost of living crisis. Postings have been sustained at a high level by a robust inflow of new job postings.
Job postings remain elevated in a number of categories, though some have seen a correction in recent months. Four categories — retail, loading & stocking, cleaning & sanitation and therapy — have at least doubled since the onset of the pandemic. Retail and therapy have gained momentum since the start of Q2, but most of the other leading categories have seen a correction.
Lower-wage job postings continue to outperform
With most of the leading categories being lower-wage ones, there remains a considerable gap in job postings performance across wage tiers. Despite a slight recent softening, the lower-wage tier remains 69% above the pre-pandemic baseline, comfortably ahead of the mid- and high-paid tiers (34% and 40% respectively).
Labour Market Overview
We’re starting to see signs of the labour market losing momentum, as cost of living pressures weigh on the UK economy and the post-pandemic jobs boom seemingly fading. The latest figures from the Office for National Statistics (ONS) showed the employment rate slipping further to 75.4% in the three months to July, down from a recent peak of 75.9% in the period to May.
Vacancies dropped 33,000 in August on the single-month measure, though remain close to record levels. With the unemployment rate dropping to just 3.6%, there remains extreme tightness in the labour market with fewer than one unemployed jobseeker per vacancy.
Inactivity jumps
The rate of economic inactivity jumped in the three months to July, reversing its recent falls to hit its highest since late-2016. The UK is an outlier internationally in having a lasting participation gap in the wake of the pandemic. The latest jump was centred on the 16-24 and 50-64 age groups. Rising student numbers and a continuation of the concerning trend of growing long-term sickness were key drivers.
Real terms pay squeeze
Despite historically strong nominal regular pay growth at 5.2% year over year (y/y), high inflation meant that real wages were down -2.8% y/y, one of the largest falls on record.
The squeeze on public sector workers is particularly acute. Their regular wages increased by just 2% y/y in nominal terms compared with 6% for private sector workers, the largest gap on record outside of the pandemic period.
In Indeed data, we are seeing that the high demand for new workers in low-paid jobs is driving pay growth rates higher. Several lower-paid categories continue to show robust annual increases in advertised wages in Indeed job postings, driven by persistent hiring challenges. That said, few categories are seeing wages keep up with inflation. The overall increase for all jobs is 6.0% y/y.
Conclusion
The UK economy faces considerable headwinds but the labour market remains remarkably tight. Though an economic slowdown could result in vacancies retreating from current elevated rates, the labour supply picture remains concerning and hiring challenges don’t appear set to dissipate any time soon. The tight labour market generating strong nominal wage growth is a clear concern for Bank of England policymakers as they grapple with inflationary pressures at a time when the government has announced a major fiscal expansion.
We host the underlying job-postings chart data on Github as downloadable CSV files. Typically, it will be updated with the latest data one day after this blog post was published.
Methodology
All figures in this blogpost are the percentage change in seasonally-adjusted job postings since 1 February, 2020, using a seven-day trailing average. 1 February, 2020, is our pre-pandemic baseline. We seasonally adjust each series based on historical patterns in 2017, 2018, and 2019. Each series, including the national trend, occupational sectors, and sub-national geographies, is seasonally adjusted separately. We adopted this methodology in January 2021.
The number of job postings on Indeed.com, whether related to paid or unpaid job solicitations, is not indicative of potential revenue or earnings of Indeed, which comprises a significant percentage of the HR Technology segment of its parent company, Recruit Holdings Co., Ltd. Job posting numbers are provided for information purposes only and should not be viewed as an indicator of performance of Indeed or Recruit. Please refer to the Recruit Holdings investor relations website and regulatory filings in Japan for more detailed information on revenue generation by Recruit’s HR Technology segment.
