Labour market indicators

People have been moving out of “economic inactivity” at a record rate, including moves into employment, the Office for National Statistics (ONS) reported last month.

The estimate for payrolled employees reached 30.0 million (after an increase of 102,000).

However, other labour market indicators pointed to comparatively modest changes in the latest results. In the October to December period, the UK employment rate was up by 0.2 points at 75.6% (thanks to an increase in part-timers). The unemployment rate increased by 0.1 percentage points to 3.7%.

Within the decrease in economic inactivity, the trend was driven by those inactive because they were students, retired, or long-term sick.

Meanwhile, the level of vacancies was still high at 1.134 million (a fall of 76,000 on the quarter).

Overall earnings growth continued to strengthen. Average regular pay growth for the private sector was 7.3% in October to December 2022, compared with 4.2% for the public sector. But workers are still losing ground.

Even though the ONS tends to disregard RPI inflation, it still reported a 2.5% fall in real terms in regular pay (3.1% in total pay including bonuses) — one of the largest falls in growth since 2001.