The latest release of labour market data for the UK was widely covered in the media, so there is no point in revisiting the headline numbers which looked strong (perhaps, given Brexit uncertainty, surprising strong). The aspect of the labour market that rarely receives much attention is the level of job vacancies.
I think this is a serious lapse on the part of commentators and economists because, all other things being equal, the first way that a business, large or small, can react to a perceived or anticipated change in economic conditions is by adjusting hiring intentions.
Given all the pessimistic comments that have been forthcoming from industrial and employers’ organisations and also from a range of individual companies, one might have expected heightened Brexit concerns to be reflected in a more cautious approach to hiring. However, there has been hardly a flicker. In the three months to February this year there were 854,000 job vacancies (calculated on a survey basis by the Office for National Statistics). While this was slightly down on the previous month, it was still some 39,000 higher than a year earlier and 92,000 higher than in February 2017.
There is an observation I have often made in the past: never mind the driver, watch the wheels. In other words, don’t be mislead by a driver’s comments about which way he is turning or even the way that he seems to be leaning – just watch the direction that the wheels are pointing, because they will tell you the direction of travel.
To be honest, I have been surprised by the continued robust trend in job vacancies; I am surprised that it has not softened appreciably given the fiasco that the politicians are creating around Brexit. But the wheels of industry cannot and should not be ignored, and the direction in which they are pointing remains for the moment very reassuring.
Categories