- The number of people who are inactive because of long term sickness rose to a record high.
- The employment rate and vacancies fell very slightly in January-March. However, so did unemployment and inactivity.
- Estimated employees for April fell 136,000 to 29.8 million. This is the first drop since February 2021.
- In the last three months there has been a record flow out of inactivity – driven by people moving into employment.
- After CPIH inflation, real total pay (including bonuses) fell 3% and real regular pay (excluding bonuses) fell 2%.
- Before inflation, total pay (including bonuses) was up 5.8% and regular pay up 6.7%.
- Growth for the private sector was 7% and for the public sector was 5.6%. Growth for the public sector hasn’t been this fast for 20 years.
The ONS has released employment and wage data for the year to January-March.
Weakness Creeps Into Jobs Data
The one constant throughout the past few years of turmoil has been that overall the job market has held up. It has persuaded us to keep spending, and buying property, because despite all the financial stress, an awful lot of people have felt that their job is secure. Unfortunately, this set of figures sees some weakness creep into jobs data.
Unemployment And Inactivity Falls
People who are fit to work are flooding back from ‘inactivity’ at a record rate. However, there’s no such relief for those who are struggling with long term sickness. People suffering from conditions that were exacerbated by lockdowns and gaps in care during the pandemic aren’t getting the care they need.
According to the BMA, in March there were 7.3 million people waiting for NHS care – and they estimate it will take a year to clear the backlog. It means the number who are economically inactive because of long term sickness has hit a record high.
There were also worrying signs from the more up-to-date employment figures, which fell for the first time since 2021. The ONS is keen to point out that because this is an early estimate, it could be revised later, but there’s the chance this is the canary in the coalmine for a slightly weaker employment picture ahead.
Meanwhile vacancies dropped for the tenth consecutive month, and employers said they were holding back because of concerns about the economy in the coming months. We’re still seeing historically high levels of vacancies, and the employment market remains relatively tight. However, it will be one to watch.
On the flip side, there are still some real positives, including a fall in unemployment, a drop in redundancies – which remain below pre-pandemic levels, and a rise in wages. It means that while there are warning signs, we’re a long way from ringing any alarm bells just yet.
Wages Rise
We’ve had some relief, in relatively punchy wage growth – particularly for the public sector, which hasn’t see wages rise so quickly for 20 years. There’s every chance they will continue to do so – unless both sides are prepared to remain locked into a cycle of strikes and stalemate for the foreseeable future.
There has been no let-up in the pressure on our finances, however, because wage rises are still woefully behind inflation, so each month we face an increasingly difficult battle to pay the bills.
The more positive news is that we’ve seen price cuts on some of the supermarket staples – including milk and pasta, prices have come down at the petrol pumps, and we’re expecting energy bills to drop in July.
However, these are bright spots amidst a gloomy outlook for our budgets in the coming weeks, and it’s expected to take longer for more widespread price cuts.”
Other Figures From The Release
- The unemployment rate was up 0.1pp to 3.9%, but down 0.1 percentage points from before the pandemic. The rise was driven largely by people unemployed for more than a year,
- The employment rate was 75.9% up 0.2 percentage points from the previous month but 0.7 percentage point below pre-pandemic levels.
- Inactivity rates have dropped again, down 0.4 percentage points to 21%, but still up 0.8 percentage points since the onset of the pandemic.
- The redundancy rate fell by 0.7 per thousand employees, to 2.8 per thousand employees. This is still below pre-pandemic levels.
- Vacancies fell 55,000 in the quarter to 1.083 million – it’s the tenth consecutive period of falls, and employers say they’re holding back on recruitment because of economic pressure.
Article by Sarah Coles, head of personal finance, Hargreaves Lansdown
