Markets Today: Job market booms, JD Sports’ record profits, more travel industry woes

  • Brits are working again, as new data shows the number of employees has returned to pre-pandemic levels
  • But the travel industry is bracing for a wave of redundancies once furlough support ends
  • JD Sports’ US expansion has paid off, as demand for sports fashion booms

UK labour market regains pre-pandemic strength

The UK jobs market is booming, but will the impending end to furlough temper its expansion?

The latest figures from the Office for National Statistics showed another 241,000 employees were added to UK payrolls in August, taking the total number of people in work to 29.1m – a level last recorded in February 2020. Meanwhile the number of job vacancies during the three months to August reached 1.03m, breaching the 1m mark for the first time and around a quarter of a million higher than the number of vacancies between January and March 2020.

For those who have been holidaying in the UK over the summer and noticed the number of job ads in restaurant windows, it will come as little surprise that the sector which saw the biggest rise in vacancies was accommodation and food service. Vacancies here rose by 75 per cent, although the increase may drop as seasonal factors fall away. 

Those in work are still enjoying strong pay growth. Average pay was up 8.3 per cent in May to July, although the market is being distorted by a decline in low-paying jobs and sharp wage inflation in sectors where there are severe shortages of workers, such as haulage.

But the big question remains: what effect will the ending of furlough support later this month have on the jobs market? The ONS reported that more than 1m people were still being supported by the furlough scheme at the end of August. GD

Read more: 

Is there a national labour shortage?

What does the lorry driver shortage mean for supermarket earnings?

Save travel industry by ending harsh rules, says ABTA

When the government does withdraw coronavirus job support, travel companies are likely to be hit harder than most. The UK’s leading travel agency body warned today that the industry faces a wave of redundancies when the furlough scheme ends later this month.

The Association of British Travel Agents argued the government should kill its current traffic light system, maintaining only a red list for the highest risk destinations. It also called for the end of expensive PCR testing for vaccinated travellers returning from “lower-risk countries”. New foreign holiday bookings this summer were down 83 per cent on 2019, ABTA said, while 58 per cent of holidays booked for July and August had to be postponed or cancelled. 

The government is reportedly considering changing testing requirements, and the traffic light system could end within weeks. But the industry is demanding action soon. On Monday, Heathrow Airport said that its August traffic figures were down 71 per cent compared to 2019, adding it had gone from being Europe’s busiest airport to only the 10th busiest. AH 

Further reading: 

EasyJet goes to shareholders for more cash

Booming sneaker market kicks JD Sports into high gear

JD Sports (JD.) is living the American dream.

The sports fashion group said today that profit before tax and exceptional items hit a record £439.5m in the first half of 2021, helped by the company’s recent expansion into the US. That’s a more than sevenfold increase compared to the same period last year, as JD Sports’ newly acquired US retailers Shoe Palace and DTLR contributed an additional £72.9m to the bottom line.

Executive chairman Peter Cowgill cautioned, however, that the pace of growth may not continue into the full year, if the US government stops distributing the stimulus cheques that many citizens have used to splash out on new sports shoes in recent months. As JD Sports goes on a buyout spree to strengthen its grip on the booming sneaker market, it is also now facing pressure from the UK regulator over its acquisition of rival retailer Footasylum in 2019.

But if the company continues to pull through the pandemic and the regulatory pressure, it will find itself with a giant market to tap into in the coming years. As explained in our recent cover feature, sneakers are now so popular among Gen-Z consumers that many young people have been acquiring huge collections to store as investments. OT