August 2026

Executive summary

The headline figures did not move. Employment is 75.1%, unemployment 4.9% and inactivity 20.9%, all within a tenth of a point of where they were last month and last quarter. ONS describe the market as "little changed overall". There have been 2.5 unemployed people for every vacancy for a full year now. That plateau, which we described in July as the new trend, is now the longest-running feature of the data.

Two youth figures fell on the quarter. Youth unemployment eased from 16.4% to 16.2%, its first quarterly fall this year, and the number of 16 to 24 year olds not in education, employment or training fell back below one million, to 981,000. Both moves sit inside sampling error, and both are worse than a year ago: 97,000 more young people unemployed, 30,000 more NEET. Almost all of the annual rise in NEET is in young people who are looking for work and not finding it, and the quarterly fall is almost entirely in those who were inactive. None of the organisations publishing on these figures, including the Work Foundation, Youth Futures and Impetus, read them as a turn, and nor do we.

The composition story has sharpened again. Vacancies fell to 707,000, the lowest since spring 2021 and, outside the pandemic, the lowest since 2014. Businesses with one to nine employees now have 95,000 vacancies, down 16% on the year and the fewest since the start of 2014. Retail has lost 75,000 employees over the year and hospitality 62,000. Adzuna counted 8,383 graduate adverts in July, down 46% on the year and the fewest since their records began. The Work Foundation calculate that starter jobs are disappearing 1.6 times faster than other vacancies. The first rung is still being removed, and the evidence for that is the strongest in this month's data.

There is also something new this month. The application channel is ceasing to carry information. A graduate interviewed by the BBC has made 300 applications since July with a CV she has practised making "pristine", and has got nowhere. Bloomberg report London recruiters receiving applications that are all perfect and all alike, and employers moving to timed tests, referrals and networks to sort them. That helps people who already have a network and hurts everyone else. We set out in July that AI has made polished documents close to free to produce. This month the employers are saying it too.

Government is starting to act on the demand side. The first Jobs Guarantee placements began on 26 August: paid work for six months for 18 to 24 year olds who have been on Universal Credit for 18 months or more, in six areas, with 90,000 placements promised by 2029. It is the right kind of money, though small against a NEET count of 981,000. Alan Milburn's recommendations are still due in the autumn.

Real pay grew 0.5% over the year, and with inflation at 2.9% in July and rising, that is likely to be back at zero by the winter. The recruitment survey shows the two measures we said we would watch, total demand for staff and permanent vacancies, still falling, but at their slowest rates in 22 months. Permanent placements stopped falling in July for the first time since September 2022. We hold the view we took last month: the market has stopped getting worse quickly, and it has not started producing the entry points people need.

Career Allies and the Stay Nimble platform continue to scale as set out previously. What this month adds is a clearer picture of who the market is now selecting for, and it is people with a network in the right place, a qualification the sector recognises and a track record in that exact role. Most of the people we work with have skills and experience, and often a great deal of both, but not in the form the market is currently rewarding. Our own delivery data bears that out: members are reaching final interviews and losing to direct experience, and the work they are getting into is mostly part-time, temporary or below their previous level.