UK jobs market ‘shows signs of slowing’

The UK jobs market is showing signs of slowing, after a surprise drop in the number of people in work.

The unemployment rate unexpectedly rose to 3.9% in the June-to-August period from 3.8%, after the number of people in work unexpectedly fell by 56,000, official figures showed.

The Office for National Statistics also said employment growth had “cooled noticeably”.

But the unemployment rate is still close to its lowest level for 44 years.

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Figures released by the ONS indicated that the number of people in employment fell by 56,000 to 32.69 million during the three-month period.

This was below economists’ forecasts, which had predicted a 26,000 rise in employment.

However, wages continued to outpace the rate of inflation, with earnings excluding bonuses growing at an annual pace of 3.8%

“The UK labour market showed signs of slowing in the three months to August 2019,” it said.

The ONS said unemployment increased by 22,000 to 1.31 million.

“The employment rate is still rising year-on-year, but this growth has cooled noticeably in recent months,” said the ONS’s deputy head of labour market statistics, Matt Hughes.

“Among the under-25s, the employment rate has actually started to fall on the year.”

The ONS said vacancies fell again to 813,000, reaching their lowest level since the three months to November 2017.

“This is further evidence that the underlying weakness in economic growth is restraining labour market activity,” said Thomas Pugh, UK economist at Capital Economics.

“However, it could also be evidence that the uncertainty around Brexit is starting to impact firms’ hiring decisions. The survey evidence is consistent with a further softening in employment and wage growth going forward too.”