Jobs market 'robust' as unemployment falls

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Unemployment has fallen by 27,000 in the three months to February, with the jobs market remaining “robust”, according to official figures.

The Office for National Statistics said unemployment fell to 1.34 million (3.9%) and the number of people in work rose to 32.7 million.

The figures come a month after the unemployment rate fell below 4% for the first time since 1975.

ONS deputy head of labour market statistics Matt Hughes said: “The jobs market remains robust, with the number of people in work continuing to grow.

“The increase over the past year is all coming from full-timers, both employees and the self-employed.”

He added: “Earnings have now been growing ahead of inflation for over a year but, in real terms, wage levels have not yet returned to their pre-downturn peak.”

Average earnings increased by 3.5% in the year to February, unchanged from the previous month.

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Image: The increase is all coming from full-timers, according to the ONS

Matt Weston, managing director at recruitment consultancy Robert Half UK, said the growth in employment was resulting in “intensifying competition for talent” with potential employees fielding multiple, competitive job offers.

He added: “To tackle these difficulties, employers must think about the entirety of their recruitment process, streamlining hiring processes, maintaining frequent communication and offering compelling remuneration and benefits to secure candidates with the skills they need to thrive and grow.”

Business organisations were cautious, warning the government should not congratulate itself too quickly.

Tej Parikh, senior economist at the Institute of Directors, said: “The labour market remains a silver lining for the economy – but the jobs boom can’t last forever.”

He added that an “elongated period of uncertainty” had kept businesses in a “hiring cycle”.

“Many firms have lacked the confidence to put funding toward training, technology, and new machinery, which has in turn meant firms need to hire more workers to lift output.”

Mike Cherry, national chairman of the Federation of Small Businesses said the tight labour market was “yet another headache for small business owners”, around 20% of whom rely on staff from the EU.

“The sharp drop in European arrivals is a real concern for many smaller firms, particularly those in sectors such as construction, care and engineering where the contribution of EU team members is so vital.”

A trader lifts a box of roses at New Covent Garden Flower Market ahead of Valentine's Day on February 13, 2018 in London, England

Image: A tight labour market has left businesses having to compete for workers

Mr Cherry also pointed to the process for EU staff to get settled status in the UK, saying: “We were told that the process for securing settled status would be straightforward and swift. It’s proving to be anything but.”

The Trades Union Congress focused on the pay growth but described it as “modest”, adding that it was not enough to help workers “still feeling the effects of the longest pay squeeze for 200 years”.

General secretary Frances O’Grady said: “And with over half of those in poverty living in working households, we need a more ambitious plan to support jobs and wages.

“This means action from government to raise the minimum wage to £10 as quickly as possible and giving unions the freedom to enter every workplace to negotiate fair pay rises.”

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