Labour market indicators

While the jobs market remains strong, and the unemployment rate remained at a near-historic low of 3.7% in the three months to January, inflation (see column left) continues to outpace earnings growth.

Figures from the Office for National Statistics (ONS) show that growth in regular pay, excluding bonuses, was 6.5% in the period November 2022-January 2023. Total pay, including bonuses, rose by 5.7% in the same period.

But in real terms, adjusted for inflation, regular pay fell by 2.4% and total pay by 3.2% on the year in November 2022-January 2023.

There were more than 30 million employees on payrolls in January 2023 — one million above pre-pandemic levels.

The ONS said detailed figures show “record numbers of jobs in several sectors, including law and accountancy firms, health, and pubs and restaurants”.

Despite the relatively strong picture for jobs, the market shows signs of cracks as vacancies continue to fall.

They have now fallen for eight consecutive months with the ONS reporting a drop of 51,000 in the number of vacancies to 1.124 million.

The UK employment rate was up by 0.1 percentage points at 75.7%, an increase driven by part-time employees and self-employed workers.