Labour market indicators

Earnings growth over the whole economy in the three months to January was 5.9%, matching last month’s figure.

RPI inflation in January was 3.6% so this means that pay across the economy is increasing in real terms — but this doesn’t tell us anything about distribution or individual pay rates.

Figures from the Office for National Statistics (ONS) show that the employment rate for people aged 16 to 64 years is increasing slightly and now stands at 75%.

However, the unemployment rate (for people aged 16 and over) 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 ticked up to 1.775 million which is lower than recent peaks but still half a million higher than before Covid.

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

Overall, the labour market continues to cool — there were an estimated 816,000 vacancies in the last quarter, continuing a long run of decline.

There has been a marked uptick in the number of employers intending to make redundancies or “reduce headcount” (see this issue, page 25).