Job vacancies have jumped to a record high as unemployment figures dropped slightly and average earnings skyrocketed thanks to the winding down of furlough, the ONS revealed in its latest figures.
The ONS estimated there were 953,000 job vacancies in May to July 2021, growing 290,000 compared to the previous quarter and 168,000 more than pre-pandemic.
Unemployment figures, which increased during the pandemic are continuing to recover, dropping 0.2 percentage points to 4.7% in July.
Average weekly earnings saw a more substantial change, surging by 8.8%.
Laith Khalaf, head of investment analysis at AJ Bell is unconvinced by the spike in earnings.
The “sheer magnitude” of the figure “suggests it’s a transitory statistical quirk, rather than a sustainable feature of the UK economy that will be with us for the long term”, according to Khalaf.
That figure is inflated now that fewer employees are on furlough and have gone back to receiving their full wage packets, he explained.
Other investment experts warned that September will be a crucial month for employment data as the furlough scheme comes to a complete end.
“That may give an indication of how the economy will fare through the rest of the year,” said Neil Birrell, Premier Miton’s chief investment officer.
Derrick Dunne, CEO of YOU Asset Management agreed and said there would likely be “fresh job losses”.
However, he remained optimistic as “firms even in the worst-hit sectors with many businesses now on a recruitment drive. The economy should still be on track to recover in line with the Bank of England’s expectations”.
Indeed, Quilter Cheviot’s head of fixed interest, Richard Carter, said the strong figures will be “music to the ears” of the Treasury and the Bank of England.
“The Bank of England is increasingly looking to rein back its stimulus programme given the backdrop of rising inflation. The MPC will certainly have kept one eye on this morning’s stats,” he said.