The latest data from the UK’s labour market reveals a nuanced picture of employment trends as of August 2024.
According to early estimates, the number of payrolled employees in the UK saw a decrease of 59,000, or 0.2 percent, from the previous month, bringing the total to 30.3 million.
Despite this monthly drop, the annual figures still reflect growth, with a rise of 122,000 employees, marking a 0.4 percent increase compared to August 2023.
However, the Office for National Statistics (ONS) has emphasised that these August figures are provisional and could be subject to revision as more data becomes available next month.
Caution Advised Over Labour Force Survey Estimates
The ONS has also warned of increased volatility in Labour Force Survey (LFS) estimates, attributing this to smaller sample sizes. This heightened variability suggests that users should treat these estimates with caution and consider them alongside other labour market indicators such as Workforce Jobs (WFJ), Claimant Count data, and Pay As You Earn (PAYE) Real Time Information (RTI) estimates.
Employment and Unemployment Rates Show Modest Changes
For the period from May to July 2024, the UK employment rate for individuals aged 16 to 64 was estimated at 74.8 percent. While this figure is below estimates from a year ago, it marks an improvement over the previous quarter. On the other hand, the unemployment rate for those aged 16 and over was estimated at 4.1 percent, a decrease from both the previous year and the previous quarter.
The economic inactivity rate for the same age group was estimated at 21.9 percent, slightly above last year’s figures but showing a decrease compared to the previous quarter.
Claimant Count and Vacancies Reflect Changes in the Labour Market
The UK’s Claimant Count for August 2024 increased both on a monthly and annual basis, reaching 1.792 million. This rise is partly attributed to the ongoing rollout of higher administrative earnings thresholds for full work search conditionality, a change expected to impact around 180,000 claimants over a six-month period.
Meanwhile, the number of job vacancies in the UK has continued its downward trend, with an estimated decrease of 42,000 in the quarter ending in August 2024, bringing the total to 857,000. Despite this being the 26th consecutive period of decline, vacancies remain above pre-pandemic levels.
Workforce Jobs and Earnings Growth
The total number of workforce jobs in the UK was estimated at 37.1 million in June 2024, up by 503,000 from a year ago but down by 28,000 from the previous quarter. Employee jobs alone increased by 386,000 over the year and by 62,000 over the quarter, reaching 32.7 million.
In terms of earnings, annual growth in employees’ average regular pay (excluding bonuses) was 5.1 percent for the period from May to July 2024. Including bonuses, total pay saw an annual growth of 4.0 percent. However, these figures are influenced by one-off payments made to NHS and civil service employees in June and July 2023.
When adjusted for inflation using the Consumer Prices Index including owner occupiers’ housing costs (CPIH), real terms annual growth for regular pay stood at 2.2%, while total pay growth was 1.1 percent.
Labour Disputes and Strikes
The UK saw an estimated 42,000 working days lost due to labour disputes in July 2024, with the majority of strikes occurring in the health and social work sectors.
Challenges in Data Coherence and Future Developments
The ONS acknowledges ongoing challenges in ensuring coherence between different sources of employment data. While all sources reported annual growth in employment, the pace of growth has slowed significantly over the past year. The Workforce Jobs (WFJ) and RTI data sources, which focus on employee jobs, have shown a more stable and reliable trend compared to the more volatile LFS data.
Despite these coherence issues, the LFS remains the sole source for unemployment, economic inactivity, and self-employment data. The ONS is working on improving the quality of LFS estimates, with reweighted estimates expected to be published in December 2024. Until then, users are advised to interpret LFS data with caution and consider a broad range of data sources when analysing the labour market.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.
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