Darren Morgan, director of economic statistics at the Office for National Statistics (ONS), says the UK labor market is a “mixed picture”.
While unemployment has fallen, underlying regular earnings are “now falling sharply in real terms”. (ie after inflation).
The number of UK workers on the payroll continues to hit new highs, rising by 121,000 between March and April to 29.5 million.
BUT …. there are still more than half a million any less people employed than before the pandemic, at 32,569 million people (an increase from 83,000 in the last quarter).
Total job-to-job changes rose to a record 994,000 in January-March, says today’s jobs report, “driven by layoffs rather than layoffs.”
For the first time since records began, there are fewer unemployed than job vacancies, says the ONS.
While the unemployment rate dropped to 3.7%, the lowest since 1974, the number of jobs from February to April 2022 rose to a new record of 1,295,000.
That’s 33,700 more than in the previous quarter and an increase of 499,300 from the pre-coronavirus (COVID-19) pandemic level from January to March 2020.
In January to March 2022 the ratio of unemployed to each vacancy remained at 1.0 however, for the first time, the number of vacancies was higher than the number of unemployed.
This could encourage the Bank of England to continue raising interest rates in the coming months to avoid a wage-price spiral:
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Regular pay in the UK continues to lag behind inflation as workers – particularly in the public sector – are hit by the cost of living squeeze, even as the unemployment rate hits its lowest level since 1974.
Numbers just released by the Office of National Statistics show that regular compensation (excluding bonuses) increased by 4.2% per year in the three months to March.
This means that the basic salary has shrunk in real terms, as CPI inflation hit 7% in March and may have risen by more than 9% in April.
But the total payout was stronger – up to 7% per annum, with bonuses increasing some pay packages.
The Office of National Statistics reports that:
In real terms (adjusted for inflation) from January to March 2022, total compensation grew by 1.4% and regular compensation fell by 1.2% in the year.
Today’s labor market report also shows a stark difference between public and private sector workers.
The average total wage growth for the private sector was 8.2%but only 1.6% for the public sector.
The financial and business services sector showed the highest growth rate (10.7%), in part due to strong bonus payouts, says the ONS.
The jobs report also shows that the UK unemployment rate has dropped from 3.8% to 3.7% – the lowest since 1974.
The UK employment rate rose 0.1 percentage point in the quarter to 75.7%, while the number of job openings remained at a record high.
The data comes a day after Bank of England Governor Andrew Bailey reiterated his call for workers to show restraint in wage increases, particularly the highest paid.
Bailey told deputies:
“I think people, especially those who earn more, should think and reflect on asking for higher salary increases.
It’s a social issue. But I’m not preaching about it. It’s not for me to go around telling people what to do.
Unions reacted to Bailey, with Unite saying he shouldn’t “lecture” workers about wage restraint.
Assistant Secretary General of the TUC Paul Nowak stressed that:
The last thing workers need right now – in the midst of the worst crisis in living standards in generations – is to have their wages cut.
As the cost of living crisis intensifies, the CBI is calling for immediate assistance for ‘people facing real hardship’, increasing pressure on the government to help those hardest hit by Britain’s cost of living crisis.
CBI Director General Tony Danker, said the government must act on two fronts immediately.
“The first is to help people who are facing real difficulties now; it is the moral foundation of our economy and society. Recent surveys suggest that more than one in 10 households skipped out – or ate smaller meals – in the past month due to lack of affordability, while an estimated half a million more households are likely to face choices between heating and food*. Putting pounds in the pockets of the people who struggle the most should not be put off.
“In second place; start stimulating business investment now – we will need to ensure that there is ongoing economic growth to avoid any downturn in our economy that could exacerbate or prolong the cost of living crisis.
European stock exchanges are expected to open higher:
- 7am BST: UK labor market report
- 10am BST: Eurozone GDP growth statistics for the first quarter of 2022 (second estimate)
- 1:30 PM BST: US Retail Sales Report for Apro;