CBI/Pertemps Labour Market Update: February 2024

The latest ONS data covers the period from November 2023 to January 2024 and shows a labour market that remains tight overall but continues to slowly soften. Growth in employment has slowed while economic inactivity has increased. The unemployment rate decreased, returning to the same rate as a year ago and vacancies continue to fall although remain above pre-pandemic levels.

The economic inactivity rate was largely unchanged on the last quarter but is higher than estimates a year ago. The increase is driven by historically high numbers of people reporting they are long term sick. The number of vacancies continues to fall. This is the 19^th consecutive period in which vacancies have fallen, although the pace has slowed in the last period. Vacancies are still above pre-pandemic levels.

Growth in regular pay was 6.2% on the quarter to December 2023 – down from 6.7% in the previous period. In real terms, annual growth, real pay rose on the year by 1.8%.

While there continues to be signs that the labour market is softening, it is happening slowly. Many businesses are still struggling to hire the people they need, leading to higher employment costs that are putting pressure on prices. With a persistently high level of economic inactivity due to long-term sickness, there is a compelling case for business and government to work together to improve the health of the UK’s workforce.

Download the full labour market update, sponsored by Pertemps, below.