The UK labour market has shown mixed signals as we approach the final quarter of 2024. Employment remains relatively stable, but trends in vacancies, earnings, and claimant numbers reflect ongoing economic challenges. Here’s a breakdown of the key developments and what they mean for workers and businesses.
Payrolled Employees: Small Gains, Minor Losses
The number of payrolled employees in the UK fell by 35,000 (0.1%) between July and August 2024, but on a year-on-year basis, it rose by 165,000, marking a 0.5% increase. Over the longer period of June to August 2024, payrolled employees grew by just 3,000 on the quarter, while the yearly increase was more substantial at 203,000.
Early estimates for September 2024 show a slight monthly decline of 15,000 employees, bringing the total to 30.3 million. However, the year-on-year gain of 113,000 employees reflects a generally stable labour market, though these figures are provisional and may change as more data comes in.
Labour Data Volatility
Due to smaller sample sizes in the Labour Force Survey (LFS), data estimates have become more volatile, meaning these results should be treated cautiously. Combining LFS data with other sources such as Workforce Jobs (WFJ) and Pay As You Earn (PAYE) Real Time Information can offer a more balanced view of the market.
Employment, Unemployment, and Economic Inactivity
The UK employment rate for people aged 16 to 64 rose to 75.0% in the three months leading to August 2024, reflecting growth over both the quarter and year. Meanwhile, the unemployment rate fell to 4.0%, showing continued recovery. The economic inactivity rate—those not working and not seeking work—dropped to 21.8%, signaling that more people are rejoining the workforce.
The Rising Claimant Count
In September 2024, the UK Claimant Count increased to 1.797 million, marking both monthly and yearly growth. This rise coincides with changes in the Department for Work and Pensions’ administrative earnings threshold, which affects approximately 180,000 claimants and is expected to contribute to the growing Claimant Count over the next few months.
Job Vacancies Continue to Decline
UK job vacancies fell again, with a decrease of 34,000 in the three months to September 2024, bringing the total to 841,000. This marks the 27th consecutive quarter of declining vacancies, although numbers remain higher than before the COVID-19 pandemic. The continuous drop suggests that businesses are cautious about hiring due to economic uncertainties.
Pay Growth and Earnings Trends
Wage growth continues, with regular earnings (excluding bonuses) up by 4.9% in the year to August 2024. However, total earnings, including bonuses, grew at a slower rate of 3.8%. Adjusted for inflation, real pay growth remains modest, with regular pay up 1.9% and total pay up just 0.9%.
Labour Disputes
In August 2024, 31,000 working days were lost to labour disputes, signaling ongoing dissatisfaction in parts of the workforce. While the disruptions are relatively minor, they reflect broader tensions, especially regarding pay and working conditions.
Conclusion
The UK labour market in October 2024 presents a mixed picture. Employment rates are improving, and payrolled employees are increasing year-on-year, but the rising Claimant Count and declining job vacancies signal caution ahead. Pay growth is promising, though inflation continues to erode real earnings gains. Businesses are becoming more cautious, and sectors remain unsettled, as indicated by labour disputes.
Going forward, the market remains in a delicate balance, and it will be important to monitor these trends closely to assess the strength and sustainability of the UK’s economic recovery.
Vacancies and jobs in the UK: October 2024
- The estimated number of vacancies in the UK in July to September 2024 was 841,000, a decrease of 34,000, or 3.8%, from April to June 2024.
- Vacancy numbers decreased on the quarter for the 27th consecutive period in July to September 2024, with vacancies decreasing in 15 of the 18 industry sectors.
- Total estimated vacancies were down by 141,000 (14.4%) in July to September 2024 from the level of a year ago, although they remained 45,000 (5.7%) above their pre-coronavirus (COVID-19) pandemic January to March 2020 levels.
- The number of unemployed people per vacancy was 1.6 in June to August 2024, down from 1.7 in the previous quarter (March to May 2024).
Office for National Statistics (ONS), released 15 October 2024, ONS website, statistical bulletin, Vacancies and jobs in the UK: October 2024
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