Unemployment hits 42-year low but wages stagnate

Joblessness has hit a 42-year low, as employment soars to a new high, according to a study from the Office for National Statistics (ONS).

The ONS reports that the number in work has risen 379,000 since the UK’s vote to leave the EU, whilst the number of jobless candidates fell by 4.9%. However, it’s not all good news as wages face a more subdued growth. Speaking about salary levels, Andrew Wishart of Capital Economics, told The Independent: “The continued absence of a pick-up in wage growth is likely…with inflation reaching 2.9% in August, the squeeze on households’ real incomes probably intensified.”

With employment numbers rising by 181,000 on the previous quarter, job creation has clearly intensified, which is promising news for the recruitment industry. In particular, employment for candidates, aged 16-64, hit 75.3% - a new high. “The recession, and its aftermath, has weakened the link between unemployment and wages,” Ian Stewart, Economist at Deloitte, told the publication.

“In the past this degree of tightness in the jobs market would be pushing wages higher. Instead earnings growth has flatlined in the last couple of years.”

And, despite the positive employment report, the cost of recruitment is hitting businesses hard. A survey, conducted by the British Chambers of Commerce (BCC), found that changes in employment legislation, such as the apprenticeship levy, pensions auto-enrolment and a new higher minimum wage, have worked together to increase business costs. 

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