New official data suggests a mixed picture for the UK’s labour market, with employment down on the previous month but up from the same period in 2023.
The Labour market overview, UK: October 2024 showed that the number of employed people in August fell by 35,000 compared to July, but had risen by 165,000 on the year.
In June to August 2024, this increased by 3,000 over the quarter and by 203,000 (0.7%) over the year, the Office for National Statistics (ONS) found.
According to the data, the employment rate for people was estimated at 75% in June to August 2024, higher than a year ago, and grew in the latest quarter.
In the same period, the UK unemployment rate among those aged 16 years and over was estimated at 4%, below estimates a year ago, and dropped in the latest quarter.
UK labour market
Non-UK jobseekers prop up labour market postings
In July to September 2024, the data showed the estimated number of vacancies in the UK fell by 34,000 on the quarter to 841,000 – a decline on the quarter for the twenty-seventh consecutive period, but still higher than pre-Covid levels.
In terms of annual pay growth, employees’ average regular earnings excluding bonuses was 4.9% in June to August 2024, while growth in total earnings including bonuses was 3.8%. However, the total annual growth figure is skewed by one-off payments made in the NHS and civil service from June to August 2023.
The data further revealed a 1.9% real-terms growth in regular pay from June to August 2024, and a 0.9% growth in total pay.
Meanwhile, economic inactivity due to ill-health now stands at 2.75 million, consistently falling since it peaked at 2.83 million in the period from February to April 2024.
Nicholas Hyett, investment manager at Wealth Club, said: “This batch of labour market data could hardly be better from the Chancellor’s point of view. Unemployment and economic inactivity are both down, while employment is up and wages are up by considerably more than inflation. No signs of recession here thank you very much.”
However, the Resolution Foundation warned that this “continued softening” of the jobs market could put an end to pay growth.
Its economist Charlie McCurdy said: “The jobs market continues to soften, with the number of workers in payrolled employment falling in August. This softening means that wage rises are also starting to weaken.
“Should these labour market trends continue, Britain’s brief era of healthy pay growth could soon end. Today’s data should serve as a further warning that future pay growth will need to be driven by rising productivity, rather than a hot jobs market.”
Commenting on the economic inactivity relating to ill-health data, Dr Helen Gray, chief economist at Learning and Work Institute (L&W), said: “This month’s data show that the number of people economically inactive due to long-term sickness remains elevated, at 2.8 million – double the number of people who are unemployed. This highlights the need for the forthcoming White Paper on the Plan to Get Britain Working to focus on joining up work, skills and health, and providing support to the nine-in-10 out-of-work disabled people each year who do not currently receive help to find work.”
Matthew Percival, future of work director, CBI, said: “Five months of falling sickness-related inactivity is a welcome start to turning around the workforce shortages that have been a brake on growth in recent years.
“At the budget later this month, the chancellor has an opportunity to build on this start by implementing a comprehensive package of health tax incentives – like tax-free private medical treatment – which could help people back into the workplace.”
Ben Harrison, director of the Work Foundation at Lancaster University, added: “The government has promised to get Britain working and it is positive that the Employment Rights Bill prioritises strengthening flexible working, which can allow workers with disabilities and long-term health conditions to better manage their health and wellbeing while remaining in work. However, if a new ‘day one right’ to flexible working is to mean anything, it is imperative that provisions in the legislation do not inadvertently allow employers to effectively reject flexible working requests out of hand.
“In addition, government must prioritise reforming and investing in its work and health programmes and working with employers to re-design job roles and provide flexibility around existing health conditions to help workers stay in sustained employment.”
In terms of labour disputes, the ONS data showed there were an estimated 31,000 UK working days lost because of these in August 2024.
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