Labour market indicators

Old and new measures of labour market strength were both pointing towards a "cooling" jobs market last month.

By the traditional Office for National Statistics (ONS) yardstick, the Labour Force Survey (LFS) put the 16-64 employment rate as falling, at 74.5% in January to March 2024 (below estimates of a year ago and in the latest quarter).

Meanwhile, the number of payrolled employees plateaued between February and March 2024, while provisional April figures were down by 85,000 (0.3%) to 30.2 million. Job vacancies continued to fall, down to 898,000 (although still above pre-pandemic levels).

As the ONS is now treating the traditional LFS estimate of unemployment "with caution" (it has gone up by 166,000 on the quarter to 1,486,000, to 4.3%), an alternative indicator is the Claimant Count (which includes out-of-work Universal Credit claimants as well as Jobseeker’s Allowance claimants).

For the first quarter of 2024, computerised records showed a rising count of 1.569 million (compared with the pre-pandemic first quarter of 2020 when it was 1.228 million).

But average weekly earnings trends are more positive. They are finally growing faster than most prices, at between 5.7% (including bonus) and 6.5% (excluding bonus payments).