The latest figures from the Office for National Statistics (ONS) Labour Market Overview report for July 2024 indicate a gradual cooling of the labour market. Key indicators show a decline in the number of vacancies and a rise in unemployment. While earnings growth remains relatively strong and UK payrolled employees increases.

Short-Term Movements and Comparisons

The short-term movements in employment measures have varied, with decreases in Labour Force Survey (LFS) estimates and increases in payrolled employees from HMRC’s Real Time Information (RTI) data. These measures, which cover different time periods and concepts, may show divergent trends for individual data points. Therefore, long-term comparisons are recommended for more stability, as illustrated by the Annual growth rate comparisons dataset from the ONS, which indicates a weakening trend in medium-term employment growth.

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Latest Data Insights

Payrolled Employees

• April to May 2024: Payrolled employees increased by 54,000 (0.2%).
• May 2023 to May 2024: A rise of 265,000 (0.9%).
• June 2024 (provisional): An increase of 16,000 (0.1%) from the previous month and 241,000 (0.8%) from June 2023, totalling 30.4 million payrolled employees.

Labour Force Survey Estimates

The estimates from the Labour Force Survey (LFS) have shown increased volatility due to smaller sample sizes, necessitating cautious interpretation of quarterly changes. These estimates should be considered alongside other labour market indicators, such as Workforce Jobs, Claimant Count data, and PAYE RTI estimates.

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Employment, Unemployment, and Economic Inactivity Rates

Employment Rate

The UK employment rate for people aged 16 to 64 years was estimated at 74.4% for March to May 2024, reflecting a decrease from the previous year and the latest quarter.

Unemployment Rate

The unemployment rate for those aged 16 years and over was 4.4% in March to May 2024, showing an increase from the previous year and the latest quarter.

Economic Inactivity Rate

The economic inactivity rate for those aged 16 to 64 years was estimated at 22.1% for March to May 2024, higher than the previous year but decreased in the latest quarter.

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Additional Labour Market Indicators

Claimant Count

The UK Claimant Count for June 2024 increased to 1.663 million. The Department for Work and Pensions began rolling out an increase in the administrative earnings threshold for full work search conditionality in May 2024, expected to impact around 180,000 claimants over six months, further increasing the Claimant Count.

Vacancies

From April to June 2024, the estimated number of vacancies decreased by 30,000 to 889,000. Despite this being the 24th consecutive quarter of decline, vacancy numbers remain above pre-pandemic levels.

Earnings Growth

• Regular Earnings (excluding bonuses): Annual growth of 5.7% from March to May 2024.
• Total Earnings (including bonuses): Annual growth of 5.7%.
• Real Terms Growth (adjusted for CPIH): Regular pay grew by 2.5%, and total pay by 2.2%.

Labour Disputes

In May 2024, an estimated 49,000 working days were lost due to labour disputes across the UK.

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The July 2024 ONS Labour Market Overview report highlights a complex picture of the UK labour market. While some indicators show signs of resilience, such as steady earnings growth and a relatively high number of vacancies, other measures indicate a gradual cooling, with rising unemployment and increased economic inactivity. Policymakers and stakeholders must consider these diverse trends in developing strategies to support the labour market.

Source: Labour market overview, UK – Office for National Statistics (ons.gov.uk)