Low Unemployment but Low Growth
In March of this year, unemployment in the UK fell to its lowest level since July 1974: just 3.7% and the Office for National Statistics reports that there are fewer unemployed people in the UK than there are job vacancies for the first time since records began.
But as vacancies rose to an all-time high (1.295million) in April, the rate of growth slowed for the eight consecutive month to 4.1%. For perspective, growth hit a peak last Summer of over 40% and, while Payrolls employment increased by 121,000 in April, the ONS has said that this should be treated as an upper bound which could be revised downwards.
Troublingly, participation, which has been a priority for the Bank of England in recent months, continued to decrease in March. Inactivity of 16-64 year olds is up by 0.1ppt in Quarter 1 of 2022 to 21.4% in quarter 2. The main cause of this appears to be long-term sickness from Long-Covid and longer NHS waiting lists.