Category: Contingent Workforce Management

Canada’s unemployment held steady in December as job creation neared market expectations following a large increase in hiring November. Statistics Canada reported that the Canadian economy added 9,300 jobs last month. Market expectations were for an increase in employment of 10,000, according to economists at Royal Bank of Canada. In November,  Canadian employment rose by 94,100, so the jobs added in December are a steep decline from the previous month. Canada’s unemployment rate was 5.6% in December, unchanged from November when it fell to its lowest level in more than 40 years.

The Numbers

9,300: The economy gained 9,300 jobs in December.

5.6%: The unemployment rate remained at  5.6%.

1.8%: Weekly wages increased to 1.8% over the last year. This is a 0.3% increase from November’s wage growth figure.

The Good

In 2018, employment increased by 163,000 or 0.9%. In 2018, the unemployment rate fell 0.2 percentage points to 5.6%. Full-time employment continued on an upward trend in 2018, growing by 185,000 or 1.2%, while part-time employment barely changed.There were some job gains in important sectors in the Canadian economy in December including transportation and warehousing; healthcare and social assistance as well as manufacturing. 

Manufacturing added 23,900 jobs which is an increase of 1.4% in a one month period.

The year had notable gains for Canadian women and older male workers. Among the core-working-age population (aged 25 to 54), employment in 2018 increased notably for women (+126,000 or +2.2%) and for men (+61,000 or +1.0%). At year end, the unemployment rate among this age group was 4.6% for women and 4.8% for men. For men and women aged 55 and over, employment rose by 50,000 (+1.2%) in 2018, with most of the increase among men (+43,000 or +2.0%), whose unemployment rate fell 0.8 percentage points to 5.3% over the period. For women in this age group, employment was little changed but remained strong, with their unemployment rate at 4.6%.

The Bad

The 0.9 per cent jobs growth rate in 2018 shows that the rate of growth has slowed compared with 2017 (+2.3 per cent) and 2016 (+1.2 per cent). Lackluster wage growth continues to be a concern and even a mystery as The Financial Times notes:

“Overall, average hourly wages increased two per cent in December from a year earlier, lifting the five-month trend to about 2.2 per cent. So, after several years of good-to-great aggregate employment growth, wages are only keeping pace with inflation. That’s as odd as it is disappointing.

Before this year, the jobless rate rarely fell below six per cent. Now it’s the ceiling. The unemployment rate was 5.6 per cent in November and December, the lowest in data that dates to 1976, and it has brushed six per cent only twice since November 2017.

With hiring at levels that economists associate with full employment, you’d expect stronger upward pressure on salaries. But for whatever reason, that’s not happening.”

The Unknown

Some experts consider early 2019 to be the late stages of a positive economic cycle for Canada, setting off speculation on when the next recession will start and generating concern in provinces like Alberta which have experienced recent economic difficulties:

“‘We are in the late stages of a business cycle,’ Craig Alexander, chief economist of Deloitte said. ‘That doesn’t mean that a recession is around the corner, but we need to recognize that we’re 10 years into an economic recovery, expansion. Business cycles are typically eight to 10 years long.’

Alexander said markets are probably overreacting to the possibility that another downturn could be almost upon us. He thinks the more likely case is that growth will continue to slow.

The economy’s evolution will have different impacts depending where one lives, he added.

For example, the energy sector faces big challenges.

Part of it comes from the recent plunge in oil prices, but there’s also been an extra discount on the price of western Canadian crude caused by transportation bottlenecks out of the Alberta oilpatch.

‘This is sad news for Alberta,’ Alexander said. ‘They’ve only barely recovered from the last recession.’”

The Labor Department released its December 2018 Jobs Report which shows that U.S. employers added 312,000 jobs in December. The unemployment rate increased to 3.9 percent last month. Year-over-year wage growth increased to a 3.2 percent pace as the best rate since 2008. U.S. employers have added to payrolls for 99 straight months, extending the longest continuous jobs expansion on record.

The Numbers

312,000: The economy added 312,000 jobs in December.

3.9%: The unemployment increased to 3.9 percent.

3.2%: Wages increased 3.2 percent over the last year.

The Good

The 312,000 jobs added greatly beat analyst expectations. After revisions to the October and November data, the U.S. added a net 2.64 million payrolls in 2018, the best year for job growth since 2015. Wages, which had been slowing rising for much of 2018, have begun to pick up more quickly. December’s year-over-year increase hit 3.2 percent. While the unemployment rate increased to a five-month high, it is not a cause for concern because the participation rate stands at 63.1 percent and is the highest since September 2017. Reaction to the report has been overwhelmingly positive. As one Bloomberg economist noted:

“This is the strongest employment report of this economic cycle – hands down. While we’ve seen greater job gains in some months, the plus-300,000 number along with another increase in average hourly earnings clearly signals that the economic expansion ended 2018 on strong footing. Perhaps most surprising was the two-tenths rise in the unemployment rate due to an increase in participation. It’s one month of data, but talk of the Fed cutting rates in the near future should be off the table for now.”— Tim Mahedy, Bloomberg Economics

The New York Times reported even more jubilant reaction:

“It’s an unequivocally phenomenal report all the way around,” said Ellen Zentner, chief United States economist at Morgan Stanley. “Anyone that finds something negative in this report is simply cherry picking.”

Economists offered raves that could appear on a movie poster or a book jacket — “Extraordinary!” “Blowout,” “Wow!” The figures, they said, offer a resounding response to the question of whether a recession is imminent: “Never mind!” said David Berson, chief economist of Nationwide. “The fears of the economy tipping into a recession now have clearly been overstated.”

The Bad

While there may be no notable negative points in the jobs report, the U-6, or underemployment rate, was unchanged last month at 7.6 percent. This measure includes part-time workers who want a full-time job and people who are less active in seeking work. This is a possible indication that companies that are contending with a tight talent pool may not be reaching the right part-time workers who would prefer to onboard as full-time workers.

A challenge for employers may be an emerging trend of offering part-time workers the same benefits as full-time employees. Receiving “full-time” benefits can also remove an incentive to look for full-time work.  As the Seattle Times reports:

“Almost half of the 391 companies surveyed by the International Foundation of Employee Benefit Plans now offer the same health insurance coverage for all employees. About a third offer paid maternity or parental leave to their part-time workers, too, the survey found.”

The Unknown

The tight labor market may increase pressure to allow greater immigration to the U.S. or to find a solution that will allow foreign workers to fill the gaps in the country’s workforce. Like the US, Japan is facing a declining birthrate and an aging population which has led to recently passed legislation aimed at attracting foreign workers:

“Japanese lawmakers have passed controversial legislation expanding the number of semi-skilled foreign workers who can live and work in the notably insular nation for up to five years.
Japan has been pressed to make the change because of a critical labor shortage that results from its rapidly aging society and low birth rate.

Japan’s upper house of parliament passed the law 161 to 76 just after 4 a.m. Saturday local time, after a day when the opposition parties tried to unsuccessfully to block the measure.

The law will go into effect in April 2019.

The legislation has been viewed as a last-resort measure by Prime Minister Shinzo Abe’s ultra-conservative government to address a severe shortage of workers in 14 industries, including restaurants, nursing, construction and agriculture.”

Australia’s unemployment rate rose to 5.1% against expectations in November when the labour force grew faster than employment. The Australian Bureau of Statistics (ABS) reported that employment increased by 37,000 in seasonally adjusted terms, beating analyst expectations of an increase of 20,000. Australia’s total employment is now 12.694 million, the highest level on record.

The Numbers

37,000: The Australian economy added 37,000 jobs in November.

5.1%: The Australian unemployment increased to 5.1%.

65.7%: Labour force participation rose to 65.7%.

+3: According to the NAB, the business confidence index fell to +3 index points.

Upside

According to the November Labour Force figures released by the Australian Bureau of Statistics (ABS), employment jumped by 37,000 in seasonally adjusted terms, which exceeded analyst expectations of an increase of 20,000. Total employment now stands at 12.694 million, the highest level on record. Since November 2017, full-time employment has increased by 180,200 while part-time employment increased by 105,500.

The rise in the labour force participation rate reflects an increase of Australians looking for work, which can be interpreted as the increased confidence in finding work for those who previously stayed away from the job market.

In seasonally adjusted terms, the largest increase in employment was in Victoria (up 30,900), followed by Queensland (up 21,800).

Downside

The job spike in November was entirely fueled by part-time jobs. While part-time employment increased 43,400, full-time employment decreased 6,400. In Victoria where the most impressive job gains were posted, Business Insider Australia reports:

“The Victorian state election was held during the month, potentially explaining the large rise in employment in the state. 29,362 of the 30,900 jobs created during the month were part-time positions.”

Apprehension is being expressed over the slow growth of wages, the slowing rate of job growth and the potential impact on the broader economy. The Sydney Morning Herald notes:

“…Of more concern were increases in measures of the broader jobs market. The under-employment rate increased to 8.5 per cent while the under-utilisation level lifted by 0.2 percentage points to 13.6 per cent.

The federal government pointed to separate figures from the Jobs and Small Business Department showing a lift in the annualised wage increases contained in federally registered enterprise agreements.

The annual increase jumped by 0.5 percentage points to 3.2 per cent. This was driven by the public sector as private sector agreements lifted by a modest 0.2 percentage points to 3 per cent.

However, the number of people on registered agreements continues to fall while there is no clear connection between these wage increases and those across the broader economy.

Two years ago, annual wage rises in federal agreements hit 3.5 per cent. At the same time the wage price index fell to its lowest level on record of 1.9 per cent.

The annual rate of jobs growth is also slowing. Through 2017 employment grew by 3.4 per cent with almost 412,000 jobs added to the nation while over the past 12 months it has slowed to 2.3 per cent.

AMP Capital chief economist Shane Oliver said with jobs growth slowing and the quality of new jobs ebbing, there would be ongoing pressure on households.”

Unknown

While the changes to Australia’s workplaces due to advances in technology, including artificial intelligence and automation remain to be seen, a new sample study reveals anxiety many workers have for their future:

“More than half (51 per cent) of Australian workers worry about their jobs due to the impact of technologies such artificial intelligence (AI) and automation.

They fear the impact of technology on job security even more so than the state of the economy, according to research by the Swinburne University of Technology’s Centre for the New Workforce in collaboration with YouGov.

Most feel they are not ready for the changes they expect over the next five years.

The survey which polled 1000 people found that almost three in five (59 per cent) are prepared to take charge and be responsible for preparing themselves for the future of work.

They want their learning to be work relevant. “Learning on the job” was ranked as their preferred (38 per cent) way to learn.

Swinburne’s Centre for the New Workforce is working alongside partners including Deloitte and LinkedIn to help organisations prepare their people to prosper in the face of digital disruption.

The Centre investigates the fundamental changes in the future of work and develops new approaches to learning.

‘New technologies are transforming work and workplaces as we know them, and this pace of change is set to accelerate further in the coming years,’ says Linda Kristjanson, Swinburne Vice-Chancellor.

‘As a society we must make sure we invest in our people as much as we invest in technology, to ensure we can thrive in the future of work.’
Sean Gallagher, Director of the Centre for the New Workforce, says companies tend to focus more on their technology requirements than on preparing their people.

‘The future of work must foremost be about people,’ says Gallagher.

‘Australian workers want to take on the responsibility of their own upskilling to prepare for the future of work.

They want their learning to be work-relevant, accessible, and integrated with work in a supportive environment.’”

If you are inclined to celebrate and have a few friends over when the UK labour market report is filled with positive news, then, by all means, start icing the champagne. December’s report published by the Office for National Statistics includes the following details:

• Wages continued to rise at their highest level in nearly a decade.
• The number of people working in the UK rose by 79,000 to 32.48 million. That is the highest figure since records began in 1971.
• The unemployment rate was 4.1 per cent, virtually unchanged compared with May to July 2018 and lower than the estimate for a year earlier (4.3 per cent).

Rising Wages: The Missing Part of the Recovery. Until Now.

Wages are growing ahead of the rate of inflation and it is thought that this rise is pay is due to the tight job market. As the Financial Times reports:
“The rise in salaries is also beginning to overcome significant increases in prices. Real regular pay, which takes into account inflation, was up 1.1 per cent in the October period — a level not seen since late 2016.

‘While Brexit uncertainty and political paralysis are having a cooling effect on the wider economy, the labour market is proving more resilient,’ said Stephen Clarke, senior economic analyst at the Resolution Foundation.

‘Britain’s tightening jobs market is delivering stronger pay rises, particularly for workers in ICT (information and communication technology), hospitality, and real estate,’ he said. ‘2019 looks set to be a far better year for pay than this one.’

Real pay growth has, until recently, been the missing part of the UK’s post-crisis recovery. While unemployment fell and employment rose, pay growth remained stubbornly low and, in real terms, median pay packets are still worth less than they were in 2008.”

The December ONS report notes that for October 2018 average regular pay (excluding bonuses), before tax and other deductions from pay, for employees in Great Britain was £495 per week in nominal terms (that is, not adjusted for price inflation), up from £479 per week for a year earlier. This would be £1,916 in a four week month. This is certainly welcome news for Britain’s workers. But while wages are rising faster than inflation, it is not clear that they are keeping up with key elements of the cost of living. For example, the average cost of renting a home in Britain per month was £1,212 in November or nearly two thirds of the average wage earner’s monthly salary.

Historic Employment Figures: A Challenge for Employers

While the number of people working in Britain rose to a record high, unemployment also increased by 20,000 to 1.38 million. The ONS report notes that “The reason both employment and unemployment have increased is a result of the UK’s rising population and more people joining the labour force, such as students and older people.”

The challenges presented by a tight labour market is a cause for concern for UK employers:

Suren Thiru, head of economics at the British Chambers of Commerce, commented, “Businesses report that the political and economic turbulence, together with significant difficulties finding the right staff, are diminishing recruitment intentions, which is likely to increasingly weigh on the UK labour market over the near term. More must be done to support firms looking to recruit.”

The lack of available workers is compounded by a skills shortage in the UK, particularly in the technology sector as The Times reports:

“The technology industry fears that a skills shortage could stunt its growth, with new figures showing that job vacancies are growing.

The number of unfilled positions in the information and communication technology sector last quarter rose by 24.3 per cent compared with a year ago, according to data from the Office for National Statistics, one of the largest increases of any industry.

The ratio of jobseekers with previous employment in the industry to relevant jobs has dropped below one, meaning that there are more vacancies than people looking to fill them.”

Brexit Uncertainties: The Unwelcome Guest that Just Won’t Leave

No matter how good a jobs report may be, uncertainty over Brexit continues to cast a shadow over any positive economic news:

“Leaving the EU is likely to disrupt many sectors of the UK economy, including those that rely heavily on European workers. The magnitude of the disruption will depend on the details of the final Brexit agreement, which is making its way through a tortuous political process leading up to the March 29 deadline. In the longer term, the trading relationship between the UK and the EU after the Brexit transition period will be crucial. Will trade continue to be nearly frictionless or will it suffer economic and administrative barriers? Will migration policy support or hinder growth? The answers to those questions will determine the extent to which Brexit affects the economy’s productivity and thus the living standards of UK residents.

Hiring challenges. Low unemployment, falling migration and uncertainty about post-Brexit migration policy mean that businesses in many sectors are finding it increasingly difficult to hire staff. To recruit the workers they need, will employers tap more into under-utilised demographic groups? Young people, single parents, minorities and people with disabilities are less likely than average to be part of the labour force and their unemployment rates are above average. Whether employers manage to attract those groups into employment through higher wages or benefits — or whether they respond to hiring difficulties in other ways, like investing in automation — is a trend to watch in 2019.”

So by all means, open up that bottle of champagne. The ONS report provides plenty of good reasons to celebrate. Just be aware that there are many sobering details that must be dealt with after the celebration ends.

Canada’s unemployment rate fell to 5.6 per cent, the lowest level since 1976. Canada added 94,100 net jobs for its largest monthly increase since March 2012, Statistics Canada said in its most recent labour force survey. But even with healthy job growth, wage gains appear to be slowing. Both hourly and weekly wage growth rates have been dropping since May and are below the rate of inflation.

The Numbers

94,100: The economy gained 94,100 jobs in November.

5.6%: The unemployment rate fell to 5.6 per cent.

1.5%: Weekly wage increases are 1.5 per cent over the last year. This is a 0.3 per cent decrease from October’s wage growth figure.

The Good

The 94,100 jobs gained in November were fueled by 89,900 new full-time positions and 78,600 employee jobs in the private sector. Employment among the core age group (those aged 25 to 54) was up 49,000 in November, the result of increases for both women (+32,000) and men (+17,000). The unemployment rate fell by 0.4 percentage points to 4.6 per cent for core-aged women, and by 0.2 percentage points to 4.7 per cent for core-aged men. In the 12 months to November, employment within this age group rose by 208,000 (+1.7 per cent), largely the result of gains for women (+129,000). In the 12 months leading up to November, employment grew by 219,000 or 1.2 per cent.
Employment was up in six provinces including Quebec with 26,000; Alberta with 24,000; Ontario with 20,000; British Columbia with 16,000; 5,500 in Saskatchewan and 2,600 in Manitoba. On a year-over-year basis, the number of private sector employees rose by 146,000 (+1.2 per cent), while the number of public sector employees grew by 48,000 (+1.3 per cent).

The Bad

Average weekly wage growth fell to just 1.5 per cent and hourly wage growth slowed as well as the CTV reports:
“Year-over-year average hourly wage growth for permanent employees continued its decline in November to 1.46 per cent — its lowest reading since July 2017.
‘There’s no question that the headline job growth is gangbusters strong,’ said Frances Donald, head of macroeconomic strategy at Manulife Asset Management
‘I would caution us against celebrating too quickly, however, because wage growth is decelerating sharply.’”
Experts have been expecting wage growth to pick up its pace, thanks to the tightened labour market. But the opposite has been happening — wage growth has dropped every month since its May peak of 3.9 per cent and now sits well below inflation.
Employment declined in information, culture and recreation (-10,000 or -1.3 per cent), continuing the downward trend that started in August. The decrease was driven by Ontario. Compared with 12 months earlier, employment in this industry was down by 25,000 (-3.2 per cent) at the national level.

The Unknown

The Financial Times reports that the digital economy has created a demand for 216,000 more tech workers, according to a new study. However, it is unclear whether there are enough available workers in Canada to meet this demand:
“Blockchain, artificial intelligence, 5G mobile networks, 3D printing and virtual reality are creating a need for digital skills that will see a demand for an estimated 216,000 additional technology workers by 2021, according to a new report.
A study by the Information and Communications Technology Council (ICTC), found that employment of information and communications technology professionals outpaced the economy last year six-to-one.
‘What’s happening now is we are seeing fast-paced industries go from low growth to high growth,’ said Namir Anani, president and chief executive of ICTC.
‘We have to look at how do we reposition the workforce rapidly through short-duration training to provide pathways and mobility to get into fast-growth sectors of the Canadian economy that are increasingly becoming digital.’
As more industries recognize the importance of a digital strategy, competition for tech workers has increased. ICTC highlighted transportation, retail, healthcare, finance and manufacturing as sectors where demand is ramping up.
‘The environment is changing fast and every sector is seeing its own disruption,’ Anani said.
‘We have to reflect as a country on how do we leverage (disruption) and what are the transitional strategies we have to build to move some of the displaced workers from low-growth to high-growth areas of the economy.’
There was a five per cent increase in employment for digitally skilled workers in 2017, the highest growth in 10 years, according to ICTC’s report. Meanwhile, 60 per cent of Canada’s tech workers were now spread across non-tech sectors.
Not only are Canadian companies struggling to find enough digitally skilled workers to fill positions in the present, but the largest group of tech workers is already approaching retirement, with 13.1 per cent being between the ages of 55 to 64. ICTC’s research was conducted with the support of Microsoft Canada.
‘The issue is really about supply and demand. The demand is increasing as more sectors are adopting digital technologies and the supply of talent and skills is a challenge,’ said Navdeep Bains, the federal Minister of Innovation, Science and Economic Development.
‘When we put forward our Innovation and Skills Plan, by far this was the number one issue — around training and people having the right skills to succeed today and for the job tomorrow.’”

The Labor Department released its November Jobs Report which shows 155,000 jobs added to the U.S. economy. The pace of hiring slowed while the unemployment rate remained at 3.7 percent, which is the lowest point since 1969. The participation rate also remained unchanged at 62.9 percent. U.S. employers have added to payrolls for 98 straight months, extending the longest continuous jobs expansion on record.

The Numbers

155,000: The economy added 155,000 jobs in November.

3.7%: The unemployment remained to 3.7 percent.

3.1%: Wages increased 3.1 percent over the last year.

The Good

The 155,000 jobs added to the economy in November adds to an unprecedented run of continuous growth. 2018 is shaping up to be a year of impressive expansion given the 12 month job growth in key sectors of the American economy: Healthcare employment has increased by 328,000; Manufacturing has grown by 288,000 and Business and Professional Services has expanded by 561,000 jobs.
The annual wage gain is also a sign that the economy is continuing to grow, but at a more measured pace than earlier in the year. As the New York Times reported:
“It’s obviously an economy that is well in expansion mode but that is coming off the boil after a strong second and third quarter,” said David Donabedian, chief investment officer of CIBC Private Wealth Management. “So the state of the job market is good. It’s just that the pace of job creation is slowing a little bit.”
Yearly wage growth remained at 3.1 percent for the second month in a row, a level not seen since the recession. “If you have solid wage growth while productivity is improving, that is the best of both worlds,” Mr. Donabedian said.

The Bad

The 155,000 jobs added in November fell below analyst expectations. The slowing pace of hiring is perceived to be caused by the inability of employers to find the right workers to fill their open positions. This appears to be the case in many parts of the economy, including those with some of the highest job gains this year such as healthcare. The Wall Street Journal reported on one such business in the high-demand area of elder care:
“The modest job-growth slowdown could be a sign of slightly softer demand for goods and services by consumers. For some companies, hiring also might be slowing because they can’t find the workers they need because unemployment is so low.”
That was the case for Home Instead Senior Care, an Omaha, Neb.-based in-home care provider, said its Chief Executive Jeff Huber. The company employs about 65,000 U.S. caregivers through its franchises, a 23 percent increase from three years ago.
“We could grow even more robustly if the labor market weren’t so tight,” Mr. Huber said. “The competitive job market is really restricting on our growth. There’s just tremendous demand for caregivers.”
Labor costs for the company, including wages and benefits, have risen about 20 percent annually in recent years, he said, but revenue is also growing robustly. The company is offering more training and flexible schedules to attract and retain employees, and recruiting older workers who have finished careers but aren’t ready to fully retire. A third of caregivers are older than 60, Mr. Huber said.

The Unknown

The recent announcement that General Motors would be laying off nearly 14,000 workers raises the question of whether these newly available workers would have the skills required to find new work, even in the current labor market in which job seekers are highly favored. This point was underscored by General Motors CEO Mary Barra:
“As Barra announced the cutbacks, she also said GM plans to acquire “skillsets of the future” by hiring in software development, battery and fuel cell technology and autonomous vehicle development,” The Detroit News reported. “You will see us having new employees join the company as others are leaving,” she said. “We still need many technical resources across the company.”

The Australian Bureau of Statistics released its October jobs numbers showing an unemployment rate that remained steady at 5.0 per cent as nearly 33,000 jobs were added and the participation rate rose to 65.6 per cent.

The Numbers

32,800: The Australian economy added 32,800 jobs in October.
5.0%: The Australian unemployment remained at 5.0 per cent.
65.6%: Labour force participation rose to 65.6 per cent.
+4: According to the NAB, the business confidence index fell to +4 index points.

Upside

Hourly pay rates in Australia rose by 0.6 per cent in the last quarter which met analyst expectations. Wages have now increased 2.3 per cent over the past 12 months, which is the highest annual growth rate in three years. Public-sector hourly rates of pay rose by 0.6 per cent in the quarter and 2.5 per cent over the year, while private-sector workers received a 0.5 per cent increase in the quarter and 2.1 per cent over the year.

Unemployment remained steady at 5.0 per cent which was below analyst expectations. The unchanged rate is good news since the labour force participation rose during the month. When more people join the labour pool, unemployment rates can go up if those who have just started to participate are not working yet. Full-time employment was up 42,300 following the addition of 24,600 in September.

In seasonally adjusted terms, the largest increase in employment was in New South Wales (up 16,300), followed by South Australia (up 7,700).

Downside

The largest decreases in employment were in Victoria (down 3,500 persons), followed by Queensland (down 3,200 persons). Part-time employment decreased by 9,500 jobs. The Business Confidence Index fell to +4.0. The wage increases, though they are the highest in three years, are relatively lackluster. As ABC reports:
“While jobs growth has been rolling at 2.5 per cent over the year, it has yet to ignite wages growth.

Capital Economics analyst Marcel Thieliant said wage growth is still unlikely to pick up even if unemployment falls below 5 per cent in coming months.
‘The ageing and higher education levels of the workforce coupled with improved job-matching via the internet suggest that the natural unemployment rate may now be as low as 4 per cent,’ Mr. Thieliant said.

‘What’s more, the unemployment rate is not telling the whole story. The seasonally adjusted underemployment rate remained at 8.3 per cent, underlining that there’s still a large number of employees that would like to work additional hours.’”

Unknown

Apprenticeships received a boost when the Australian government recently announced an investment of AUS$60 million for a trial wage subsidy as an incentive for employers in regional and rural communities to employ more apprentices. Starting January 1, 2019, the new subsidy under the Australian Apprenticeships Incentives Program will support eligible new Australian Apprentices in areas such as plumbing, mechanical, electrical, painting trades and hairdressing, which are currently experiencing skills shortages. Whether these wage incentives attract sufficient apprentices and employers willing to hire them to address the ongoing skills gap remains to be seen.

Australia’s largest national youth survey found the following:

“Taking on an apprenticeship leads to the highest level of wellbeing among young Australians out of all post-school pathways, according to the results of the nation’s largest youth survey to be released today.

The Skillsroad 2018 Youth Census gained more than 30,000 responses nationally from youth aged 15-24, and found that those undertaking an apprenticeship, traineeship, or working in some capacity were happier overall and experienced higher levels of ‘meaning,’ ‘resilience’ and ‘optimism’ than all other pathways after school.

Additionally, that survey participants who were working whilst in secondary school, and contributing financially to their housing situation (even if living at home with parents), reported higher levels of well-being than those that weren’t.”

This month’s UK Labour Market Report, which covers July through September, brings to mind a gathering of friends sitting around the dinner table when a long-anticipated guest bursts through the door and breathlessly announces, “I have good news and bad news, which do you want first?” This month’s report contains elements that are unquestionably good and bad, but there are some items where interpretation varies.

First, the objectively good news: The number of employed people rose by 23,000, bringing the employment total to a new high of 32.41 million, which is 350,000 more than a year earlier. And the bad news? The UK unemployment rate has risen to 4.1 per cent, up from a 43-year low of 4.0 per cent. In the last quarter, 21,000 UK workers lost their jobs.

Below, we focus on factors that are up for interpretation.

Wages

The growth in UK wages accelerated to a near 10-year high. Average nominal earnings (wages excluding bonuses) rose 3.2 per cent from the same quarter a year earlier. This is the largest increase since December 2008 and higher than the expected 3.1 per cent predicted in a Bloomberg survey.

The rise in wages is continuing to outpace prices, which is a relief for those impacted by the inflation surge following the Brexit vote. While the rate of pay growth may be greeted positively by workers, it is a concern for employers who are feeling the pressure to raise wages to retain and attract talent in a tight market.

Job Vacancies

Job vacancies hit a record high of 845,000, which is welcome news for job seekers who find themselves “in the driver’s seat” given the high demand for workers. A large number of job vacancies can be perceived as a sign of a robust economy with many enterprises seeking to grow.

However, this high number of open positions can take a toll on both employers who have to ensure profitability with a smaller number of workers and the workers who may be required to take on extra responsibilities. Given the number of opportunities available, workers may feel the lure of quitting for a more lucrative position when they carry a burdensome workload.

EU Nationals as Part of the UK Workforce

There were 132,000 fewer EU nationals working in the UK than a year earlier, bringing the total to 2.25 million. This was the largest annual drop in the number of workers from Europe since the Office for National Statistics began keeping track in 1997.

The fall in EU workers was due to a decline of 154,000 workers from the eight eastern and central European accession countries that joined the EU in 2004. This was offset by an increase of about 23,000 workers from other EU countries. The Financial Times reports:

“Stephen Clarke, senior economic analyst at the Resolution Foundation think-tank, said that the fall in EU migrant workers ‘shows that Britain’s labour market is already changing ahead of its exit from the EU.’

‘Firms who employ a large share of migrant workers need to think now about adjusting to a lower migration environment, in terms of the workers they employ, what they produce and how they operate,’ he said.”

This may be music to the ears of those who hoped that Brexit would bring more job opportunities to UK nationals. For others, the decline in EU workers exacerbates an already difficult skills shortage and increases the pressure to raise wages to attract home-grown talent.

If we check back in with the gathering of friends sitting down to dinner, some may have heard mostly good news and some mostly bad, but they can all agree that there is much to digest as the year draws to a close and Brexit looms ever closer.