Labour market indicators

Earnings growth over the whole economy in the three months to December 2024 was 5.9%, up from 5.6% previously. This healthy above-inflation growth was driven by the private sector — and strong rises in sectors like construction and retail — with the public sector lagging behind on 4.7%.  

Figures from the Office for National Statistics show that the employment rate has stayed relatively stable, with a slight uptick in the previous quarter.

But the unemployment rate has continued to rise over the last year. It now stands at 4.4%, higher than it was pre-Covid but not as high as it reached during the peak of the pandemic.

The jobless claimant rate was up to 1.75 million, lower than recent peaks but still half a million higher than pre-Covid.

Meanwhile, slightly fewer people are classified as “economically inactive”, although numbers remain historically high.

Trends of note are that the number of employees is increasing while self-employed workers are decreasing. The number with second jobs is also going up, following decreases in early 2023. There were 1.274 million (3.8% of people in employment) working two jobs in the latest quarter. 

Overall, the labour market continues to cool: there were an estimated 819,000 vacancies in the last quarter, continuing a long run of decline.