The number of unemployed in the UK fell again over the quarter to the end of October, meaning the nation’s jobless rate is at its lowest in 42 years, official data showed.

Job vacancies and number in work hits a high in the UK

Although the number employed fell by 56,000 in the quarter, the total of just over 32 million in work remained close to a record and was 325,000 higher than a year earlier, according to figures from the Office for National Statistics (ONS).And the number of vacancies over the three months hit a record high of 798,000: the highest since comparable records began in 2001.ONS statistician Matt Hughes said, “Employment stayed close to its record high and, while up on a year ago, declined compared with the previous three months.“Unemployment also fell, but there was a rise in the number of people who were neither working nor looking for a job. Meanwhile the number of vacancies continue to grow, reaching a new record high.“There has been a slight pick-up in pay growth in cash terms (to 2.3 per cent), which means that, although earnings are still growing less than inflation (3.1 per cent), the gap has narrowed.”Employment Minister Damian Hinds said, “We’re ending the year on a strong note, with figures showing the unemployment rate has fallen every month in 2017, and is now at the lowest it’s been in over 40 years.“Employment is at a near-record high, and there are over three million more people in work now compared to 2010 – that’s more than the population of Greater Manchester.“Universal Credit is helping people get into work quicker, and ensuring they get more money in their pockets for every hour they work.“Universal Credit supports both the unemployed and the low-paid, as people don’t have to end their benefit claim when they find a job. This is especially important at this time of year, when many people take on temporary seasonal work.”

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Skilled labour tailing off

Dr John Philpott, director of The Jobs Economist, said the data showed that the supply of skilled labour available on the market was tailing off, partly because of a reluctance of EU workers to come to the UK since the Brexit referendum.“The rapid growth in labour supply of recent years has seemingly gone into the reverse. The main reasons for this are a sudden surge in student numbers and a fall in the number of citizens (emigrating from) the central and eastern European countries that joined the EU in 2004.“In principle, this drop in available labour should be good news for unemployed jobseekers. The steady unemployment rate may, therefore, indicate a lack of employability on the part of the remaining pool of unemployed.”

Has the labour market hit a peak?

Prof Geraint Johnes, research director at the Work Foundation and professor of economics at Lancaster University Management School, commented, “The latest labour force statistics provide further evidence that the labour market has peaked and is now starting to turn down.“While there was a small increase in the number of full-time employees, there was a large fall in the number of full-time self-employed workers. Unemployment, meanwhile, continued to fall, and now stands at 4.3 per cent. The simultaneous fall in employment and unemployment is possible because there has been a large increase (115,000 over the quarter) in the number of economically inactive.“There have been large falls in employment in the distribution sector and in information and communication. Meanwhile numbers employed in professional, scientific and technical fields and in administration and support have increased.”

Self-employment causes employment splutter

Ian Brinkley, acting chief economist at the CIPD, the professional body for HR and people development, said he also suspected the labour market was stalling.“These figures suggest the UK’s employment engine has begun to splutter. The fall in the total number of people in work, down 0.2 per cent, is primarily driven by a fall in full-time self-employment.“Coupled with a fall in unemployment, this appears to point towards constraints in the overall supply of labour rather than a decline in demand. There is a strong possibility that the continued expansion of the labour market has hit its ceiling.“In response, employers would be wise to invest more in their existing workforce, especially in light of recent declines in the number of apprenticeships.”But Matthew Percival, head of employment at the Confederation of British Industry (CBI), said the data showed UK companies were still trying to hire staff. “The number of people in employment has fallen, but the unemployment rate remains low and there are still opportunities for job seekers with vacancies at a record high,” he said.

Recruitment agencies growing quickly

The CBI’s position appeared to be supported by a separate report on Wednesday from ClearlyPR, a specialist public relations firm for the recruitment industry, which found that the number of newly registered recruitment agencies in 2017 had risen at its fastest ever rate.ClearlyPR research found that between in the first 11 months of the year, an average of 818 agencies were formally established each month – a start-up rate 28 per cent than last year. It means the total of recruitment agencies currently registered as trading in the UK stands at 35,725.“This pours cold water on the hypothesis that employer confidence is waning. In fact, the opposite would appear to be true,” said Paul MacKenzie-Cummins, managing director at ClearlyPR.“Last year saw a doubling in the number of recruitment agencies that were founded in 2015, with the sharpest rise coming in the six months after the Brexit vote. Our research has shown that the momentum not only continued into 2017, it gathered pace.“The dramatic rise in new agencies being started over the last year is testament to the overwhelmingly positive mood within the recruitment industry.”

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