The Office for National Statistics (ONS) has released its latest labor market statistics. The data shows a cooling market, with vacancies normalising towards pre-pandemic levels and pay growth slowing down. The Chief Executive of the Recruitment and Employment Confederation (REC), Neil Carberry, commented on the figures.
He noted that while there are positive signals, like an upswing in temporary work, challenges remain. “Employment rates are still well below pre-pandemic levels, and economic inactivity is way too high,” Carberry said. It is essential that the new government works with businesses to address this and ensure that its plans for workplace regulation don’t put barriers in the way of getting jobs for those who really need them.
The number of vacancies continues to fall but is still 11% higher than in early 2020.
The unemployment rate is slightly lower than a year ago. There were modest increases in total employment and the number of payrolled employees in the latest quarter.
ONS reveals new labor market trends
Globally, equities and digital assets saw a dramatic selloff last Monday due to the Japanese Yen carry trade unwinding. The International Energy Agency (IEA) left its 2024 world oil demand growth forecast unchanged but trimmed the 2025 forecast, citing weak growth in China as a drag on global gains. Boosting workforce participation is a priority for the Labour government.
With nearly 10 million inactive working-age people in the UK, enticing these potential workers back into the labour market without raising wages and reigniting inflation is a challenge. Regular pay growth dipped to 5.4% year-on-year in June, still above the historic average. The persistence of wage and price pressures could limit the amount of monetary easing the Bank of England can deliver in the coming months.
The government has targeted reducing healthcare backlogs, expanding childcare provision, and increasing employment support to help boost labor force participation. Getting more inactive workers back into the fold is key to raising the economy’s sustainable growth speed limit while keeping inflation low.
