What’s striking about the latest UK jobs numbers is just how much the picture varies by sector. Overall, the backdrop looks stable – unemployment is unchanged at 4.9%, payroll employment is flat, and vacancies are levelling out.
But as has been the case throughout this year, the government is performing a lot better than the private sector. Public sector payroll numbers are up 0.7% so far this year, where the private sector is down 0.5% – including a further decline through June.
That weakness is particularly concentrated in consumer services – hospitality, retail and entertainment – where we’re seeing employment fall at close to 3% annualised rates, with that pace of decline showing little sign of easing off. We think that’s a consequence of last year’s National Insurance and minimum wage hikes, coupled with the fact that some of these sectors had begun to look overstaffed (weak productivity) after extreme post-Covid jobs market tightness.