Employment rises and vacancies fall, as the Labour Market continues to soften
In the period between June and August 2024, wage growth across the economy remained strong, the employment rate increased, and high inactivity rate persisted. This paints a mixed picture of the labour market, with conditions cooling but limited labour pool hindering business’s ability to grow.
The UK employment rate (for people aged 16 to 64 years) was estimated at 75.0% in June to August 2024, above estimates of a year ago and an increase on the last quarter. The UK unemployment rate (for people aged 16 years and over) was estimated at 4.0% in June to August 2024, slightly down on figures from last quarter and this time last year.
The UK economic inactivity rate for people aged 16 to 64 years was estimated at 21.8% in June to August 2024, below estimates of a year ago, and fell in the latest quarter.
In July to September 2024, the estimated number of vacancies in the UK decreased by 34,000 on the quarter to 841,000. Vacancies decreased on the quarter for the 27th consecutive period but are still above pre-coronavirus (COVID-19) pandemic levels. But based on current trends, could fall below this by the end of the year.
Payrolled employees in the UK decreased by 35,000 (-0.1%) between July and August 2024 but rose by 165,000 (+0.5%) between August 2023 and August 2024. The early estimate of payrolled employees for September 2024 decreased by 15,000 (0.0%) on the month but increased by 113,000 (+0.4%) on the year, to 30.3 million. The September 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 4.9% in June to August 2024, and annual growth in total earnings (including bonuses) was 3.8%. Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)) for regular pay was 1.9% in June to August 2024, and for total pay 0.9%.
Despite a sustained period of cooling in the labour market, persistently high economic inactivity, falling unemployment and wage growth above inflation poses a risk of overheating when businesses attempt to grow. Later this month, businesses will be looking to the Chancellor to introduce specific measures to help unlock productivity-led growth. This includes announcing an immediate flexibility to the apprenticeship levy and introducing a comprehensive package of health tax incentives, including tax-free private medical treatment.
Download the full labour market update, in partnership with Pertemps, below.
