UK labour market slightly weaker
15 May 2024The UK labour market has weakened slightly, but real wage growth continues.
The ONS has issued new data on the UK labour market, covering March 2024.
The data suggests a slight weakening of the labour market. The number of employees has fallen a little month-on-month, whilst the number of unemployed has risen. The number of unfilled vacancies has also fallen.
In recent months there has been speculation that the labour market will weaken and the latest data appears to bear this out.
However, given the weak state of the UK economy in early 2024, demand for labour remains surprisingly robust.
Unemployment is still low, by historic standards, but inactivity is a growing concern, especially amongst younger adults.
Wage growth remains fairly healthy, with the average UK wage in March up 5.7% year-on-year, according to the ONS (seasonally adjusted, including bonuses, but excluding arrears).
Research from the Bank of England shows that leading businesses expect wage growth to remain strong for another year, although the rate of change is expected to fall slightly to around 4.7% per year.
Inflation in March stood at 3.2%, so the “real” value of the average wage increased significantly. It has been increasing since mid-2023 and has grown by about 1% since then (calculating value using the CPI measure).