This report provides an overview of the UK labour market based on the December 2024 Office for National Statistics (ONS) report. It highlights trends in payrolled employees, employment rates, unemployment rates, economic inactivity, workforce jobs, vacancies, and average earnings, providing key insights into the state of the UK economy.

Key Findings

Payrolled Employees

The number of payrolled employees increased by 24,000 (+0.1%) between September and October 2024. Over the year, from October 2023 to October 2024, payrolled employees rose by 140,000 (+0.5%). However, between August and October 2024, payrolled employees fell by 22,000 (-0.1%) over the quarter but increased by 160,000 (+0.5%) year-on-year. Provisional estimates for November 2024 indicate a decrease of 35,000 (-0.1%) on the month but an annual increase of 76,000 (+0.3%) to 30.4 million employees.

Employment and Unemployment Rates

The employment rate for people aged 16 to 64 was estimated at 74.9% for August to October 2024. This rate remains largely unchanged compared to a year ago but shows an increase over the latest quarter. The unemployment rate for those aged 16 and over was estimated at 4.3%, which is higher than the previous year and the preceding quarter. Meanwhile, the economic inactivity rate for people aged 16 to 64 fell to 21.7%, marking a decline both over the year and the latest quarter.

Workforce Jobs

The estimated total number of workforce jobs reached 36.8 million in September 2024, an increase of 73,000 (+0.2%) since June 2024. Growth was seen in both employee jobs and self-employment, indicating a positive trend in the overall job market.

Claimant Count

The UK Claimant Count rose to 1.769 million in November 2024. This increase was observed both on a monthly and annual basis, signaling challenges in certain areas of the labour market.

Job Vacancies

Job vacancies in the UK decreased by 31,000 in the quarter to 818,000 for the period of September to November 2024. This marks the 29th consecutive quarterly decline. Despite this downward trend, vacancy levels remain higher than those recorded before the coronavirus (COVID-19) pandemic.

Average Earnings

In the period from August to October 2024, annual growth in average earnings was recorded at 5.2% for both regular pay (excluding bonuses) and total pay (including bonuses). When adjusted for inflation using the Consumer Prices Index including owner occupiers’ housing costs (CPIH), both regular and total pay increased by 2.2% in real terms, reflecting a positive trend in wages relative to inflation.

Labour Disputes

An estimated 42,000 working days were lost across the UK in October 2024 due to labour disputes. This figure highlights ongoing challenges in industrial relations across certain sectors.

Analysis and Context

Due to smaller sample sizes, Labour Force Survey (LFS) data has shown increased volatility. The ONS recommends interpreting these estimates with caution and considering other key indicators such as Workforce Jobs (WFJ), Claimant Count, and PAYE Real-Time Information (RTI).

While job vacancies have continued their downward trend for 29 consecutive periods, levels remain relatively resilient when compared to pre-pandemic figures. In terms of pay growth, the positive real-term increases suggest that wages are outpacing inflation, offering some economic relief to employees amidst broader financial challenges.

The UK labour market presents a mixed picture. Employment rates and workforce jobs have remained resilient, but declines in payrolled employees and ongoing reductions in job vacancies indicate areas of concern. On a positive note, annual pay growth continues to outpace inflation, providing some economic support to households. Close monitoring of labour market trends and multiple indicators will be essential for a clearer understanding of the evolving financial landscape.

Source: Labour market overview, UK – Office for National Statistics