The latest data from the Office for National Statistics reveals a complex labor market scenario in the UK.
- The employment rate for those aged 16 to 64 has seen a remarkable rise to 75% between June and August 2024.
- Despite increased employment, annual pay growth has slowed, impacting total earnings figures.
- Real-term earnings, when adjusted for inflation, show modest growth for both regular and total pay.
- Job vacancies have fallen across most industries, yet they remain slightly above pre-pandemic levels.
In a reflection of a shifting labor market, recent statistics from the Office for National Statistics (ONS) highlight an increased employment rate among the UK population aged 16 to 64, reaching an impressive 75% between June and August 2024. This marks a quarterly increase, indicating a strengthening job market despite prevailing global economic uncertainties.
Amidst this rise in employment, the growth of wages presents a more nuanced picture. Annual pay growth has decelerated, with regular earnings in Great Britain climbing by 4.9%, and total earnings, inclusive of bonuses, growing by 3.8% in the same period. The slowing of pay growth reflects last year’s significant public sector payouts, which skewed previous total pay figures.
Adjusting for inflation using the Consumer Prices Index, the real-term growth for regular pay is noted at 1.9%, with total pay showing a modest increase of 0.9%. These figures suggest that while pay growth outpaces inflation, the margin remains slender, underscoring continuing challenges in real income growth.
David Freeman, head of the ONS labour market and household division, emphasized the need for cautious interpretation of payroll data, noting, “Pay growth slowed again, with last year’s one-off payments made to many public sector workers continuing to affect the figures for total pay. However, earnings continue to rise faster than inflation.”
Furthermore, the labor market’s landscape is affected by a decline in job vacancies across most industries, although the total number of job openings still slightly surpasses levels seen before the pandemic. This trend could potentially indicate a rebalance in the market as it adapts to new economic conditions.
The UK labor market shows resilience with rising employment, but challenges remain with slowing pay growth and fluctuating job vacancies.
