In July, the labor market in the UK is exhibiting signs of a gradual slowdown, as indicated by the most recent data from the Office for National Statistics (ONS). Even though earnings growth continues to be robust, it has declined compared to several months prior. Current employment patterns show diverse short-term fluctuations among various metrics.
The Labour Force Survey (LFS) suggested a reduction in employment estimates, whereas HM Revenue and Customs (HMRC) Real Time Information (RTI) figures revealed a rise in the number of payrolled employees. In May 2024, the count of payrolled employees in the UK climbed by 54,000 (0.2 percent) compared to April and increased by 265,000 (0.9 percent) relative to May 2023. An early estimate for June 2024 pointed to an additional rise of 16,000 (0.1 percent) from the previous month and an increase of 241,000 (0.8 percent) compared to June 2023, totaling 30.4 million, according to ONS.
The estimated employment rate for individuals aged 16 to 64 years was recorded at 74.4 percent from March to May 2024, which reflects a decline from both the previous year and the most recent quarter. On the other hand, the unemployment rate for persons aged 16 years and older climbed to 4.4 percent during the same timeframe, surpassing projections from a year prior and increasing in the latest quarter.
Trends in the UK labor market for July
During the period from March to May 2024, economic inactivity for those aged 16 to 64 years was noted at 22.1 percent, which is higher than the previous year but lower than the most recent quarter. The UK claimant count for June 2024 increased both monthly and annually to 1.663 million. The Department for Work and Pensions initiated a rise in the administrative earnings threshold for full work search conditions in May 2024, likely impacting around 180,000 claimants over a span of six months, thereby contributing to the increase in the Claimant Count.
The forecasted number of job vacancies in the UK fell by 30,000 in the quarter leading to April to June 2024, reaching a total of 889,000. This marks the 24th successive quarterly drop, though vacancies continue to exceed pre-COVID-19 pandemic levels. From March to May 2024, the yearly growth rate of employees’ average regular earnings (excluding bonuses) in Great Britain stood at 5.7 percent, which was also the same for total earnings (including bonuses).
In real terms, adjusted for inflation using the Consumer Prices Index, inclusive of owner occupiers’ housing costs (CPIH), regular pay experienced a growth of 2.5 percent and total income rose by 2.2 percent during this period. In May 2024, approximately 49,000 working days were lost due to labor disputes throughout the UK.
