Unemployment and inactivity rise while pay plateaus.
The latest ONS data shows a largely unchanged labour market that remains tight overall but continues to slowly soften. The UK employment rate (for people aged 16 to 64 years) was estimated at 74.5% in January to March 2024, below estimates of a year ago, and decreased in the latest quarter.
The UK unemployment rate (for people aged 16 years and over) was estimated at 4.3% from January to March 2024, above estimates of a year ago, and increased in the latest quarter. Payrolled employees in the UK fell by 5,000 (0.0%) between February and March 2024 but rose by 288,000 (1.0%) between March 2023 and March 2024.
The UK economic inactivity rate for people aged 16 to 64 years was estimated at 22.1% in January to March 2024, above estimates of a year ago, and increased in the latest quarter. Those inactive due to long-term and temporary sickness have increased slightly this quarter.
From February to April 2024, the estimated number of vacancies in the UK decreased by 26,000 in the quarter to 898,000. Vacancies decreased in the quarter for the 22nd consecutive period but are still above pre-coronavirus (COVID-19) pandemic levels. Annual growth in employees' average regular earnings (excluding bonuses) in Great Britain was 6.0% from January to March 2024, and annual growth in total earnings (including bonuses) was 5.7%.
Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)) for regular pay was 2.0% from January to March 2024, and for total pay was 1.7%.
While there continue to be signs of the labour market cooling, it is still overheating and there is not yet any indication that pay rises are reducing to a level compatible with easing inflation and reducing interest rates.
Download the full labour market update, sponsored by Pertemps, below.