The Labour market softens
The latest ONS data covers the period from May to July 2024. The UK employment rate (for people aged 16 to 64 years) was estimated at 74.8% in May to July 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 4.1% in May to July 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 21.9% in May to July 2024, above estimates of a year ago, but decreased in the latest quarter.
In June to August 2024, the estimated number of vacancies in the UK decreased by 42,000 on the quarter to 857,000. Vacancies decreased on the quarter for the 26th consecutive period but are still above pre-coronavirus (COVID-19) pandemic levels.
Annual growth in employees' average regular earnings (excluding bonuses) in Great Britain was 5.1% in May to July 2024, and annual growth in total earnings (including bonuses) was 4.0%. This total annual growth is affected by the NHS and civil service one-off payments made in June and July 2023.Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)) for regular pay was 2.2% in May to July 2024, and for total pay was 1.1%. Estimates for payrolled employees in the UK decreased by 6,000 (0.0%) between June and July 2024 but rose by 203,000 (0.7%) between July 2023 and July 2024.
The early estimate of payrolled employees for August 2024 decreased by 59,000 (negative 0.2%) on the month but increased by 122,000 (0.4%) on the year, to 30.3 million. The August 2024 estimate should be treated as a provisional estimate and is likely to be revised when more data are received next month.
The labour market continues to send mixed signals with a continued softening of hiring intentions and vacancies, but easing pay pressures and a small decrease in long-term sickness for the fourth month in a row. Tackling economic inactivity is one of the big challenges in our labour market, and will be crucial to securing sustainable growth. At the Budget, the government can build on this momentum by making it easier for employers to play their part in keeping employees healthy and preventing them from becoming sick in the first place. That includes making Employee Assistance Programmes (EAPs) fully tax-free benefits and relaxing rules on tax relief for employer-funded medical treatment.
Download the full labour market update, in partnership with Pertemps, below.
