“It’s encouraging that the unemployment rate remains historically low but difficulty in finding staff and rising prices are a worry for many families and businesses,” Chancellor the Exchequer Jeremy Hunt said. Companies have said they would rather hang on to staff than let them go due to difficulties hiring. Job postings slipped in 14 of the 18 sectors tracked by the ONS as employers turn cautious amid a deteriorating economic backdrop. The number of advertised vacancies fell for the tenth time in a row but still remained at 1.1 million, well higher than pre-pandemic levels. In a further sign that pressures may be easing in the labor market, employers scaled back recruitment. There are now 438,000 more long-term sick than before Covid. However, people inactive due to long-term sickness hit another record high. The increase in employment and unemployment was driven by another sharp fall in inactivity, those not looking for work, which was most marked among 16-64 year olds as students returned to the labor market. There are now just 78,000 fewer people in work than before the pandemic and the number of hours worked is almost back at pre-Covid levels. The employment rate rose 0.2 percentage points to 75.9%. The jobless rate edged up to 3.9% from 3.8%.
Crucially, a key wage metric watched by the BOE - annualized private wage growth - accelerated to 5.9%, a level economists say is not consistent with bringing inflation back to the 2% target. Private-sector pay excluding bonuses is still rising by 7% year-on-year. Average earnings excluding bonuses rose an annual 6.7% in the three months through March, up from 6.6% in the period through February.
Wage growth - the key indicator watched by the Bank of England - nonetheless continued its march higher. Meanwhile, worker inactivity decreased, with 156,000 people rejoining the job market. The number of payrolled employees fell 136,000 in April, the first drop since February 2021, the Office of National Statistics said Tuesday, adding that the figure was subject to revision. The UK labor market showed fresh signs of cooling in a boost for bets that interest rates are close to peaking, although accelerating wage growth remained above the Bank of England’s comfort zone. UK Labor Market Softens Even as Wages Continue to March Higher
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