The UK labour market continues to evolve amid economic shifts and the ongoing impact of the COVID-19 pandemic. Furthermore, understanding coherence challenges around the LFS continues to be a priority; there are discrepancies in data from comparable sources. Additionally, the volatility of LFS estimates has sustained, as a result of smaller sample sizes, meaning that estimates of change should continue to be treated with caution. This article takes a deeper look into the trends to offer an understanding of the latest data and their implications.
Trends and considerations: A comparative overview
As the final quarter of 2024 begins, the labour market continues to present a mixed picture. The estimated number of vacancies in the UK decreased by 34,000 on the quarter to 841,000. Despite this being the 27th consecutive period of vacancy reduction, vacancies are still above pre-coronavirus (COVID-19) pandemic levels.
The report explains that the total annual growth in employees’ average earnings (4.9% excluding bonuses 3.8% including bonuses) in Great Britain is affected by the NHS and civil service one-off payments made in June, July and August 2023.
Latest data: employment, unemployment, and earnings
The estimation for payrolled employees in the UK has continued to decrease and by 35,000 between July and August 2024. Furthermore, the early estimate of payrolled employees for September 2024 decreased by 15,000 (0.0%) on the month but increased by 113,000 (0.4%) on the year, to 30.3 million. Consistent with last month, the estimates should be treated as provisional and are likely to be revised when more data is available.
The UK’s employment rate for people aged 16 to 64 years was estimated at 75.0% in the June to August 2024 period, succeeding estimates made a year ago and improving on the quarter. Similarly, the unemployment rate has decreased both on the quarter and on the year, now standing at 4.0%. Moreover, the UK economic inactivity rate (for people aged 16 to 64 years) was estimated at 21.8% in June to August 2024, below estimates of a year ago and decreased in the latest quarter.
Key Indicators at a Glance:
Job Vacancies: Vacancies decreased on the quarter but remain above pre-pandemic levels.
Nominal Earnings: In June to August 2024, regular and total annual growth rates are lower than the previous three-month.
Real Earnings: In June to August 2024, regular and total annual growth rates are lower than the previous three-month.
Payrolled Employees: The number of payrolled employees is now well above pre-pandemic levels.
Employment Rate: The employment rate is up on the quarter and up on the year, and is still below pre-pandemic rates.
Unemployment Rate: The unemployment rate is down on the quarter and down on the year, and is now below pre-pandemic rates.
Inactivity Rate: The economic inactivity rate is down on the quarter and down on the year, but is still above pre-pandemic rates.
Conclusion
The October 2024 Labour Market Report unveiled the continued gradual improvement of the UK’s employment landscape. Despite this, challenges remain, particularly in terms of economic inactivity and employment which are both still less favourable than pre-pandemic levels. Given the current economic uncertainty, it’s crucial to consider the labour market indicators collectively and policymakers and stakeholders must remain vigilant, utilising a broad range of data to inform decisions that will facilitate a full recovery.
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