CBI/Pertemps Labour Market Update: March 2024

The latest ONS data covers the period from December 2023 to February 2024 and shows a largely unchanged labour market that remains tight overall but continues to slowly soften. UK employment is up on the year but down on the quarter, while economic inactivity has slightly increased. The unemployment rate is above estimates of a year ago but largely unchanged on the latest quarter. Vacancies continue to fall but are still above pre-pandemic levels.

The economic inactivity rate was largely unchanged on the last quarter but is higher than estimates a year ago and increased in the latest quarter. The increase is largely due to a rise in the number of students. Those inactive due to long-term sickness has fallen slightly this quarter, but the trend still appears to be rising. The number of vacancies continues to fall. This is the 20^th consecutive period in which vacancies have fallen but are still above pre-pandemic levels.

Growth in regular pay was 6.1% on the quarter to January 2024 – down from 6.2% in the previous period. In real terms, annual growth, real pay rose on the year by 1.8%.

There continue to be signs that the labour market is softening, but it is happening slowly, with this month’s figures largely unchanged from last month. While pressures in the labour market continue to gradually ease, achieving sustainable growth requires a step change in efforts to remove barriers to work and unlock the business investment needed to boost productivity. That’s why the Chancellor was right to announce the extra funding needed to deliver expanded childcare in the Spring Budget. But firms can make a bigger contribution to tackling long-term sickness absence if health-based tax incentives are modernised. The Budget was a missed opportunity to do so.

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