Regular salary below inflation as UK unemployment drops to lowest level since 1974 – live business | The business

ONS: underlying regular profit falling sharply in real terms

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).

Commenting on today’s labour market data, ONS director of economic statistics Darren Morgan said:
(1/4) ⬇️

— Office for National Statistics (ONS) (@ONS) May 17, 2022


Commenting on today’s labor market data, ONS Director of Economic Statistics Darren Morgan said:
(1/4) ⬇️

— Office of National Statistics (ONS) (@ONS) May 17, 2022

Continuing, Darren Morgan said: (2/4) ⬇️

— Office for National Statistics (ONS) (@ONS) May 17, 2022


Darren Morgan added:
(3/4) ⬇️

— Office for National Statistics (ONS) (@ONS) May 17, 2022


Darren Morgan concluded:
(4/4) ⬇️

— Office for National Statistics (ONS) (@ONS) May 17, 2022


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.

The number of employees on payroll continued to grow in April 2022 and is now 530,000 above its pre-pandemic level.


— Office for National Statistics (ONS) (@ONS) May 17, 2022


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.”

ONS: More vacancies than unemployed people

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.

ONS says:

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:

There are now more vacancies in UK than people who are unemployed.

This remarkable fact is in one sense cause for delight but the Bank of England worries the tightness of the labour market will drive pay + prices higher still.

The case for interest rate rises strengthens.

— Joel Hills (@ITVJoel) May 17, 2022


There are now more vacancies in the UK than people who are unemployed.

This remarkable fact is, in a sense, cause for satisfaction, but the Bank of England fears that the tightening of the labor market will drive up wages + prices even further.

The argument for interest rate increases is strengthened.

— Joel Hills (@ITVJoel) May 17, 2022

Introduction: Regular remuneration below inflation

Good morning and welcome to our ongoing coverage of business, world economy and financial markets.

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.

After taking inflation into account, average pay including bonuses rose 1.4% in the year to January to March 2022, while excluding bonuses it fell 1.2%.


— Office for National Statistics (ONS) (@ONS) May 17, 2022


Inflation continuing to outstrip wage rises. Regular pay down 1.2% in real terms in the months to March.

The squeeze on household incomes intensifies.

— Tom Boadle (@TomBoadle) May 17, 2022


Inflation continues to outpace wage increases. Regular compensation fell by 1.2% in real terms in the months through March.

The squeeze on household income intensifies.

— Tom Boadle (@TomBoadle) May 17, 2022

Another example of the earnings squeeze that's hit households over the past year. Regular, real terms pay *fell*.

— Paul Waugh (@paulwaugh) May 17, 2022


Another example of the income squeeze that has hit families last year. Regular and real terms pay *fell*.

—Paul Waugh (@paulwaugh) May 17, 2022

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.

Headline indicators for the UK labour market for January to March 2022 show that

▪️ employment was 75.7%
▪️ unemployment was 3.7%
▪️ economic inactivity was 21.4%


— Office for National Statistics (ONS) (@ONS) May 17, 2022


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:

European Opening Calls:#FTSE 7487 +0.29%#DAX 14060 +0.69%#CAC 6376 +0.45%#AEX 699 +0.66%#MIB 24151 +0.49%#IBEX 8408 +0.65%#OMX 2016 +0.59%#SMI 11732 +0.51%#STOXX 3708 +0.60%#IGOpeningCall

— IGSquawk (@IGSquawk) May 17, 2022


The agenda

  • 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;

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