Unemployment falls marginally
This month's labour market figures show that the number of vacancies is continuing to fall, although these are still 11.0% higher than in January to March 2020. Vacancies decreased on the quarter for the 25th consecutive period but are still above pre-coronavirus (COVID-19) pandemic levels.
The unemployment rate is slightly below that of a year ago, while there was a modest increase in both the total number of people in employment and the number of payrolled employees in the latest quarter. The UK employment rate (for people aged 16 to 64 years) was estimated at 74.5% in April to June 2024, below estimates of a year ago, but increased in the latest quarter. The UK unemployment rate (for people aged 16 years and over) was estimated at 4.2% in April to June 2024, below estimates of a year ago, and decreased in the latest quarter. The UK economic inactivity rate (for people aged 16 to 64 years) was estimated at 22.2% in April to June 2024, above estimates of a year ago, but largely unchanged in the latest quarter.
Economic inactivity remains stubbornly high, particularly regarding the 2.8 million long-term sick. Ill health affects lives and stunts economic growth so there is an indisputable case for business and Government to work together to improve the health of people in work. Employers can play a more proactive role in the health of their workforce, but the tax system discourages it. At the Autumn Budget, the Government can make a difference through action on employee health tax incentives. Making Employee Assistance Programmes fully tax-free would complement the Government's Back to Work plan by preventing people from becoming economically inactive in the first place. Today’s CBI analysis suggests that every £1 on this measure would generate £10 for the economy.
There has been a slight slowing in the annual growth in regular earnings in the three months to June 2024 to 5.4%, although this remains relatively strong. Total earnings growth has dropped sharply over the same period because of last year's NHS one-off bonus payments. Annual growth in employees’ average regular earnings (excluding bonuses) in Great Britain was 5.4% in April to June 2024, and annual growth in total earnings (including bonuses) was 4.5%. This total annual growth rate is affected by comparing with a period including June 2023 when the NHS one-off bonuses were paid. Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)) for regular pay was 2.4% in April to June 2024, and for total pay was 1.6%.
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