Fall in unemployment driven by people ‘opting out’ of the job market and no longer actively seeking work
The fall in the official rate of unemployment is being driven by people opting out of the job market and not seeking employment, say leading audit, tax and business advisory firm, Blick Rothenberg.
Robert Salter, a director at the firm, said: “The fall in the unemployment rate by 0.3% to 4.9% as shown in the Office for National Statistics (ONS) latest report is driven by people ‘opting out’ of the job market and no longer actively seeking work.”
He added: “The fall is due to people being classed as ‘economically inactive’ rather than ‘unemployed’ by the ONS, and the rate of economic inactivity has increased since the last quarter from 20.7 to 21.0.”
Robert said: “The ONS report suggests that this increase in ‘economic inactivity’ has seen a shift towards students no longer seeking employment activities while they are studying. However, many of these unemployed students will be finishing their studies over the coming months and so any fall in economic inactivity is therefore likely to be purely temporary. Statistics suggest that about 800,000 students graduate each year from UK universities.”
He added: “Sadly, they will be coming into a job market which is quite weak in many key categories. The number of job vacancies that are available presently stands at 711,000, a fall of about 130,000 in the last 18 months.”
Robert said: “The most recent ONS statistics largely reflect the position prior to all the uncertainty and high oil prices created by the ongoing Gulf conflict. This will have impacted the job market, which will continue to be difficult for those seeking new opportunities, with graduates and school leavers struggling in particular.”