UK Labour Market Overview: July 2024
Thursday, July 18, 2024
This month's labour market figures indicate a continuing trend of gradual cooling in the UK economy. The number of job vacancies has decreased for the 24th consecutive period, while unemployment rates have shown an increase. Despite these challenges, earnings growth remains relatively strong, although it has declined from earlier peaks.
Employment and Unemployment Trends
The Labour Force Survey (LFS) and HMRC's Real Time Information (RTI) data present varied short-term movements in employment estimates. The LFS recorded a decrease in employment, while RTI data showed an increase in payrolled employees. These differences highlight the need for cautious interpretation of quarterly data and a focus on longer-term trends for more stability.
- Employment Rate: The employment rate for people aged 16 to 64 years was estimated at 74.4% for March to May 2024, a decline from the previous year and the latest quarter.
- Unemployment Rate: The unemployment rate for those aged 16 years and over rose to 4.4% in the same period, up from the previous year and the last quarter.
- Economic Inactivity Rate: The economic inactivity rate for people aged 16 to 64 years was estimated at 22.1%, higher than a year ago but showing a decrease in the latest quarter.
Payrolled Employees
- Monthly Increase: Estimates for payrolled employees increased by 54,000 (0.2%) between April and May 2024.
- Annual Increase: There was a rise of 265,000 (0.9%) in payrolled employees from May 2023 to May 2024.
- Provisional Data: Early estimates for June 2024 show an increase of 16,000 (0.1%) on the month and 241,000 (0.8%) on the year, bringing the total to 30.4 million payrolled employees. These figures are provisional and may be revised with more data next month.
Claimant Count and Vacancies
- Claimant Count: The UK Claimant Count for June 2024 increased to 1.663 million, both on the month and year. The rise is partly due to the Department for Work and Pensions' increase in the administrative earnings threshold for full work search conditionality, expected to impact around 180,000 claimants over six months.
- Job Vacancies: In April to June 2024, the estimated number of vacancies decreased by 30,000 on the quarter to 889,000. Despite the decline, vacancies remain above pre-pandemic levels.
Earnings Growth
- Regular Earnings: Annual growth in average regular earnings (excluding bonuses) was 5.7% for March to May 2024.
- Total Earnings: Including bonuses, the annual growth rate was also 5.7%.
- Real Terms: Adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH), annual growth in regular pay was 2.5%, and total pay was 2.2%.
Labour Disputes
In May 2024, the UK experienced an estimated 49,000 working days lost due to labour disputes.
Conclusion
The latest data underscores the UK's labour market's mixed signals, with falling vacancies, rising unemployment, and strong but tapering earnings growth. As the labour market adjusts, the need for careful interpretation of varied employment measures and long-term trends becomes crucial.
Vacancies and jobs in the UK: July 2024
- The estimated number of vacancies in April to June 2024 was 889,000, a decrease of 30,000 or 3.3% from January to March 2024.
- Vacancy numbers decreased on the quarter for the 24th consecutive period in April to June 2024, with vacancies decreasing in 14 of the 18 industry sectors.
- In April to June 2024, total estimated vacancies were down by 151,000 (14.5%) from the level of a year ago, although they remained 93,000 (11.6%) above their pre-coronavirus (COVID-19) pandemic January to March 2020 levels.
- In March to May 2024, the number of unemployed people per vacancy was 1.7, up from 1.6 the previous quarter (December 2023 to February 2024) because of falling vacancy numbers alongside rising unemployment.
Office for National Statistics (ONS), released 18 July 2024, ONS website, statistical bulletin, Vacancies and jobs in the UK: July 2024