CBI/Pertemps Labour Market Update: June 2024

The Labour market continues to show signs of cooling.

This month’s figures continue to show signs that the labour market may be cooling. The number of vacancies continues to fall and is unemployment rising. It is worth noting however, that earnings growth remains relatively strong.

The UK employment rate (for people aged 16 to 64 years) was estimated at 74.3% in February to April 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 4.4% in February to April 2024, above estimates of a year ago, and increased in the latest quarter.

The UK economic inactivity rate for people aged 16 to 64 years was estimated at 22.3% in February to April 2024, above estimates of a year ago, and increased in the latest quarter.

In March to May 2024, the estimated number of vacancies in the UK decreased by 12,000 on the quarter to 904,000. Vacancies decreased on the quarter for the 23rd consecutive period but are still above pre-coronavirus (COVID-19) pandemic levels.

Payrolled employees in the UK decreased by 36,000 (0.1%) between March and April 2024, but rose by 201,000 (0.7%) between April 2023 and April 2024. The early estimate of payrolled employees for May 2024 decreased by 3,000 (0.0%) on the month but increased by 167,000 (0.6%) on the year, to 30.3 million. The May 2024 estimate should be treated as a provisional estimate and is likely to be revised when more data are received next month.

Annual growth in employees' average regular earnings (excluding bonuses) in Great Britain was 6.0% in February to April 2024, and annual growth in total earnings (including bonuses) was 5.9%. Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)) for regular pay was 2.3% in February to April 2024, and for total pay was 2.2%.

While the labour market continues to slowly cool, it remains very difficult for companies to hire the people they need to grow and pay continues to rise significantly faster than inflation, pushing up prices. Labour shortages remain one of the biggest challenges facing businesses. A credible plan to tackle shortages should involve pulling a range of policy levers such as removing barriers to work, supporting investments in technology, building a skills system that supports lifelong learning, and a new approach to immigration.

Download the full labour market update, sponsored by Pertemps, below.