Wage growth persists while employment figures continue to paint a mixed picture.
Learn about the latest trends in the labour market.
In the quarter to November 2024, wage growth across the economy remained strong, unemployment and employment levels both increased, and economic inactivity marginally fell but remains high. This paints a mixed picture of the labour market, with conditions cooling but the challenges associated with activating the finite labour supply persisting.
The UK employment rate (for people aged 16 to 64 years) was estimated at 74.8% in the period September to November 2024, which is slightly down on the quarter and reversing the gains made earlier in 2024. The UK unemployment rate (for people aged 16 years and over) was estimated at 4.4% during the same period, slightly up on the year and the quarter.
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The UK economic inactivity rate for people aged 16 to 64 years was estimated at 21.6% in the period September to November 2024, marginally down on the year and the quarter. Between September and November 2024, the estimated number of vacancies in the UK decreased to 812,000 (-24,000). Whether or not the number of vacancies is lower than pre-pandemic increasingly depends on which data sources and data point are used. The big picture remains that the number of vacancies continues to fall.
Payrolled employees in the UK decreased by 32,000 (-0.1%) between October and November 2024 but rose by 95,000 (+0.3%) between November 2023 and November 2024. The early estimate of payrolled employees for December 2024 decreased by 47,000 (+0.2%) on the month and 8,000 (0.0%) on the year to 30.3 million. The December 2024 estimate should be treated as a provisional estimate and is likely to be revised when more data is received next month.
Annual growth in employees' average regular earnings (excluding bonuses) in Great Britain was 5.6% in the quarter to November, and annual growth in total earnings (including bonuses) was the same. Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)) for regular pay and total pay was 2.5% and 2.4%, respectively, across the same period.
Despite a slight uptick in unemployment and decrease in inactivity, the labour market story remains broadly unchanged: businesses cannot rely on bringing more people into the labour market to deliver on short or longer-term growth objectives, and attention must be paid to how workforce productivity can be raised. Businesses will be looking to the Chancellor at the forthcoming Spending Review to make changes that can help unlock business investment in areas such as technology and training.