The job market has been stalling, and there has been a weakening in wage growth. However, the employment data has shown a welcomed increase on the quarter. The annual growth of regular pay in the UK has fallen sharply, amidst a dropping number of vacancies and an unchanged rate of unemployment. The average total earnings, excluding bonuses, eased from 7.3 percent to 6.6 percent in the September to November 2023 period. The Office for National Statistics (ONS) said that the average weekly wages, including bonuses, were at 6.5 percent, the lowest rate since the three months to January last year, and one of the steepest falls in wage growth since the COVID-19 pandemic.
The latest published ONS data recorded a core Consumer Price Index (CPI) of 5.1 percent. In November, the inflation rate made a surprise drop to 3.9 percent. Chancellor Jeremy Hunt said it was “heartening to see real wages growing for the fifth month in a row.” On top of the record cut to national insurance worth nearly £1,000 in a typical household with two working people, putting more money in their pockets, the chancellor added. Tuesday figures also showed that the public sector enjoyed a slightly higher wage growth (6.6 percent) than the private sector with 6.5 percent. The largest annual regular pay growth rate of 7.2 percent was recorded in the wholesaling, retailing, hotels, and restaurants sectors.
Employment indicators showed a decrease in the number of job vacancies over the three months to Dec. 2023, settling at 934,000 vacancies. Comparing the October to December 2023 months with the same time the year before, human health and social work were the industries that decreased the most with a 17.6 percent decrease in the estimated number of vacancies in these sectors. The employment rate in September to November increased by 0.1 percent on the quarter to 75.8 percent, while the unemployment rate remained unchanged at 4.2 percent.
The ONS’s director of economic statistics Liz McKeown said that the overall picture was “broadly stable.” Labour officials disagreed, with the shadow minister Alison McGovern arguing that employment figures are nowhere near where they should be. Economists have predicted a continued fall in annual pay growth early in 2024, which is expected to stop fuelling fuel inflation. Senior economist at the Resolution Foundation, Hannah Slaughter, stated, “With the labor market continuing to cool, the big question is at what level pay growth will stabilize—and what this means for the health of workers’ real wages.”