The UK unemployment rate (for people aged 16 and over) is estimated at 4.0% for June-August 2024, down from a year ago, having fallen in the last quarter. The economic inactivity rate (for people aged 16-64) is estimated at 21.8% for the same period, down from a year ago and also down from a year ago.
In terms of claimants, the UK claimant count for September 2024 rose, both month-on-month and year-on-year, to 1.797 million. From May 2024, the Department for Work and Pensions will begin to raise the administrative earnings threshold for the full work-seeking requirement.
which will affect around 180,000 claimants over a period of around six months.
potentially increasing the number of claimants during this period.
The UK’s registered employees fell by 35,000 (0.1%) between July and August 2024.
but rose by 165,000 (0.5%) compared to August 2023 to August 2024. In June-August 2024, the number of registered employees rose by 3,000 during the quarter and by 203,000 year-on-year. For September 2024, the initial estimate of registered employees fell by 15,000, but rose by 113,000 year-on-year, taking the total to 30.3 million employees.
This estimate is preliminary and is likely to be revised as more data becomes available next month. Given the increased volatility in LFS estimates due to smaller sample sizes, caution is advised when interpreting these changes.
and they are best used in conjunction with a broader set of Labor market indicators.
such as Labor force employment data and claimant count data, as well as real-time estimates of payroll data. The UK employment rate (for people aged 16-64) was 75.0% in June-August 2024, up from last year’s estimate.
UK wage growth: Significant increase despite challenges
Great Britain saw average regular wages (excluding bonuses) grow by 4.9% year-on-year in June-August 2024. Total wages (including bonuses) also grew by 3.8% year-on-year. Part of this growth was due to one-off payments made by the NHS and the civil service in June, July and August 2023.
When wages are adjusted for inflation using the Consumer Price Index including housing costs for owners (CPIH).
regular wages grew by 1.9% in real terms.
while total wages rose by just 0.9% over the same period.
In addition, the UK recorded a loss of around 31,000 working days in August 2024 due to Labor disputes. It is important to note that three-month average wages were used to assess employees who are paid under the Right to Information Act, allowing for accurate comparisons. However, annual employee growth rates are not included in the Labor Force Survey (LFS) for the period following the July to September 2022 cutoff.
Statistics on wage growth face consistency challenges.
with the most recent data showing annual growth of between 0.7% for salaried employees and 1.2% for LFS employees. While annual growth across all sources has slowed over the past year.
the last two periods have seen a notable acceleration in employment growth. In June to August 2024, the number of LFS employees grew by 1.2% compared to 0.4% growth in July to September 2023.
On the other hand, annual growth in the number of salaried employees continued to slow.
falling from 1.8% a year ago to 0.7% in the same period this year.
Analysis of the Quality of Labor Force Statistics and Their Impact on Employment
As noted in last month’s Labor Market Review, the long-term consistency of employment and earnings indicators when comparing year-over-year changes reinforces confidence that these sources provide more accurate readings of the state of employment, particularly among workers. These sources continue to show a marked and sustained slowdown in employment growth over the past year.
and are less volatile than labor force statistics over the same period.
Despite the challenges associated with data consistency, labor force statistics remain the only source that provides data on unemployment, inactivity, and the self-employed. They also include details that cannot be obtained from other sources.
Since external indicators suggest that recent increases in labor force statistics may overestimate actual employment growth.
we expect other fundamental labor market indicators to be affected as well. For example, the more conservative growth seen in alternative employment sources may indicate that the decline in unemployment or inactivity rates was less than estimated by labor force statistics.
Some of the recent fluctuations in the LFS estimates are likely due to the increased sample size and changes in data collection methods introduced last year.
as well as any fundamental changes in the labor market. We continue to improve the quality of the LFS, as evidenced by the Performance and Quality Monitoring Report.
which showed an increase in the number of interviews conducted. We are currently working on reweighting the LFS estimates, with revised estimates expected to be published in December 2024.
which will enhance consistency between the LFS and other sources.
In light of these developments, we recommend caution when interpreting short-term changes in the LFS data.
and encourage users to use a variety of available sources.
