The UK labour market is currently navigating a number of challenges, but it remains in a strong position overall.
Despite economic headwinds and slow growth, the labour market has displayed resilience in June 2023. The unemployment rate has remained at a low level of 3.8%, and the number of people in employment has increased by 100,000. These positive indicators suggest that the UK labour market is poised for continued growth in the coming years.
Payrolled employees
The number of payrolled employees has surpassed pre-pandemic levels. As of May 2023, there has been a monthly increase of 23,000 individuals compared to April 2023, bringing the total to 30 million.
Employment rate
The employment rate has shown improvement both on a quarterly and yearly basis. Between February and April 2023, the estimated employment rate in the UK reached 76.%, marking a 0.2 percentage point increase compared to the period from November 2022 to January 2023. This quarter witnessed a significant rise in the number of employed individuals, reaching a record high, driven by increases in both employees and self-employed workers.
Unemployment rate
The unemployment rate has increased on a quarterly basis but remains unchanged compared to the previous year. During the period from February to April 2023, the unemployment rate rose by 0.1 percentage points to reach 3.8%. This increase can primarily be attributed to individuals who had been unemployed for up to 12 months.
Economic inactivity rate (all aged 16 to 64)
The economic inactivity rate has decreased on a quarterly and yearly basis, but it still surpasses pre-pandemic rates. Between February and April 2023, the economic inactivity rate declined by 0.4 percentage points to 21%. This decline was driven by individuals who were inactive for reasons other than unemployment or those who had family or home life obligations. However, it is worth noting that there was a record high in the number of individuals who were inactive due to long-term sickness.
Job vacancies
Although job vacancies decreased on a quarterly basis, they remain above pre-pandemic levels. Between March and May 2023, the estimated number of job vacancies decreased by 79,000 compared to the previous quarter, amounting to 1,051,000 vacancies. This decline marks the 11th consecutive period of decreasing vacancies, reflecting industry uncertainties. Survey respondents frequently cited economic pressures as a factor inhibiting recruitment.
In conclusion, the UK labour market has demonstrated resilience in June 2023, with low unemployment rates and an increase in employment figures. Although challenges persist, the government is taking steps to address them, and the labour market is expected to continue to grow in the coming years. Employers may face difficulties in filling open positions, but the decrease in redundancies and the rise in hours worked indicate a positive trend.
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