The number of payrolled employees in the UK saw a modest increase of 15,000 from December 2023 to January 2024, culminating in a 1.3% rise over the year, adding a total of 386,000 employees. Despite this growth, there’s a noted deceleration in the rate of annual expansion, signaling a cooling job market.
The provisional figures for February 2024 hint at a continued albeit slow growth, with payrolled employees increasing by 20,000 over the month, marking a 1.2% year-on-year increase to reach 30.4 million. However, the ONS urges caution with these early estimates, anticipating potential revisions in the upcoming report.
The employment landscape
The employment landscape is further complicated by the increased volatility in Labour Force Survey estimates, attributed to smaller sample sizes. As such, the ONS recommends a holistic view of the labour market, incorporating a variety of indicators for a fuller understanding.
The period from November 2023 to January 2024 revealed mixed signals; the employment level for individuals aged 16 and over improved annually but dipped quarterly. The employment rate for those aged 16 to 64 years fell to 75.0%, marking a decrease both annually and over the last quarter. Meanwhile, the unemployment rate slightly increased to 3.9%, and economic inactivity rose to 21.8%, indicating a slight uptick in those not seeking employment or currently unemployed.
February 2024 saw the Claimant Count, which includes those claiming unemployment-related benefits, increase by 16,800 monthly and 85,800 annually, reaching 1.585 million. This reflects ongoing pressures within the job market.
Job vacancies
Job vacancies dropped significantly, with 43,000 fewer openings in December 2023 to February 2024, marking the 20th consecutive quarterly decline. However, vacancies remain higher than pre-pandemic levels, suggesting a complex job market environment.
Wage fluctuations
Wages showed positive growth, with total earnings, including bonuses, rising by 5.6% and regular earnings by 6.1% in the year to November 2023 to January 2024. Adjusted for inflation, real-term pay growth also saw an uptick, providing some relief against the backdrop of cost-of-living concerns.
January 2024 was marked by significant labour unrest, with 203,000 working days lost to disputes, particularly within the health and social work sectors. This highlights the ongoing tensions and challenges faced by workers and employers alike in the current economic climate.
As the UK labour market continues to evolve, these figures underscore the balance between cautious optimism and the real challenges that lie ahead for workers and the broader economy.
Ken Brotherston, CEO at TALiNT Partners, commented: As the report says: ‘muddling through’ is a pretty accurate description of the overall market right now. Both Labour and the Conservatives appear to have now grasped the importance of addressing the issue of the number of economically inactive people in the UK – not before time. It is also worth noting that whilst the general trend might be a cooling of the market, this disguises a wide divergence of demand across different sectors – from the ice cold to the red hot.
