KPMG comments on today’s labour market figures

“Staff shortages could be a sign of a lasting problem” says Yael Selfin, Chief Economist at KPMG UK.

“Staff shortages could be a sign of a lasting problem” says Yael Selfin, Chief Economist

“The UK labour market continued to tighten at the start of 2022, with the unemployment rate falling to 3.9% and the vacancy rate reaching 4.4%. We expect unemployment to remain very low in the coming months, with a record number of job moves leading the reconfiguration of the labour market post-Covid.

“Private sector regular pay growth continued to run at around 4%, reflecting a combination of strong demand for staff and widely reported candidate shortages. While this would usually be a sign of a healthy expansion, the fall in real disposable incomes due to rising taxes and spiralling utility bills will be a bitter pill to swallow for the majority of working households.

“We are starting to see the limits to which vacancies can be filled by those re-entering the labour market. While many workers left it to take up studies during Covid, this trend has now reversed back to pre-pandemic levels. In addition, the proportion of those who are not seeking employment but would still like a job has remained at its lowest level on record, particularly for women. That could lead to enduring staff shortages if demand remains strong.”

 

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KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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