Are falling job vacancies a sign of recession?

The number of unfilled job vacancies has dropped for the fourth consecutive quarter. Many firms are holding back from hiring new people as they face a severe cost and revenue squeeze. Because job vacancies are one measure of labour demand, perhaps the drop in vacancies by 45,000 over the last three months is a sign of weakening growth and an economy teetering on the edge of recession.

In August to October 2022, the estimated number of vacancies fell by 46,000 on the quarter to 1,225,000; this is the fourth consecutive quarterly fall since May to July 2022.

The industry sectors displaying the largest falls in vacancy numbers were accommodation and food service activities

Many smaller businesses have stopped hiring because of cost pressures and worries over rising interest rates.

Unemployment in the UK in November 2022 remains low at 3.6% of the labour force, but weakening labour demand is a sign that things are about to change.