But youth unemployment rises
The latest labour market overview by the ONS has revealed a mixed bag of trends in the UK’s job landscape for May to July 2023. While employment rates remained resilient, youth unemployment surged, and labour disputes disrupted key sectors.
Steady employment rates
The report indicates that the UK’s employment rate stood at 75.5% during the period, though this represented a modest 0.5% decline compared to the previous quarter. This dip was primarily attributed to a decrease in full-time self-employed workers.
Payroll stability with a caveat
August of this year saw the estimate of payrolled employees holding relatively steady at 30.1 million, albeit with a minor drop of 1,000 from the revised July 2023 figure. It’s important to note that this August estimate is provisional and may undergo revisions once more data becomes available next month.
Youth unemployment up
A concerning aspect of the labour market was the 0.5% increase in the unemployment rate, which reached 4.3% during the same period. This spike was largely driven by a surge in individuals unemployed for up to 12 months.
Rise in economic inactivity
The economic inactivity rate also saw a slight increase of 0.1% during May to July 2023, reaching 21.1%. This uptick was particularly pronounced among individuals aged 16 to 24, while those inactive due to long-term sickness reached another record high. Conversely, individuals inactive due to family or home responsibilities hit a record low.
Declining job vacancies
Between June and August 2023, the number of job vacancies saw a significant decline of 64,000, totalling 989,000. This marks the 14th consecutive quarter of decreasing job opportunities.
Record pay growth
Despite these challenges, the labour market also saw record pay growth. Annual growth in regular pay (excluding bonuses) remained strong at 7.8%, consistent with the previous quarter and the highest since records began in 2001. Annual growth in employees’ average total pay (including bonuses) reached 8.5%, largely influenced by one-off payments in the NHS and Civil Service during June and July 2023. In real terms, adjusting for inflation using the Consumer Prices Index, annual growth for total pay increased by 1.2%, while regular pay saw a year-on-year rise of 0.6%.
Labour disputes impact working days
Lastly, labour disputes led to 281,000 working days lost in July 2023. The majority of these strikes occurred in the Education and Health and Social Work sectors, underscoring ongoing challenges in these crucial areas of the workforce.
As the UK continues to navigate the complexities of its labour market, these statistics provide valuable insights into the dynamics shaping the nation’s employment landscape.
Tania Bowers, Global Public Policy Director at the Association of Professional Staffing Companies (APSCo) commented: “The UK remains resilient, but the labour market often acts as a bellwether for wider trends. If vacancies are going unfilled and companies cannot hire the temporary resources they need, the impact will soon be felt across the economy. The recruitment market needs to be strengthened, but that will require dedication from Government officials and influencers to drive real change quickly.”