Responses to Labour Market Statistics for May 2024

Alison McGovern MP, Labour's Acting Shadow Work and Pensions Secretary, responding to the labour market statistics published this morning by the ONS, said:

“The morning after Rishi Sunak told us his plan was working, these damning new figures prove that things are just getting worse: employment down, economic inactivity up and unemployment rising.

“It's no wonder there are now a record number of people locked out of work due to long-term sickness, given NHS waiting lists are spiralling and the Tories have pushed our NHS to its knees.

“It's Labour who have the plan to get Britain working by driving down waiting lists, reforming job centres, making work pay and supporting people into good jobs across every part of the country. Change with Labour can't come soon enough.”

Ends

Notes:

• The UK employment rate (for people aged 16 to 64 years) was estimated at 74.5% in January to March 2024, below estimates of a year ago, and decreased in the latest quarter.
  
  

• The UK unemployment rate (for people aged 16 years and over) was estimated at 4.3% in January to March 2024, above estimates of a year ago, and increased in the latest quarter.
  
  

• The UK economic inactivity rate for people aged 16 to 64 years was estimated at 22.1% in January to March 2024, above estimates of a year ago, and increased in the latest quarter.

Responding to today's (Tuesday) ONS labour market figures, which shows unemployment rising by 166,000 over the last quarter to 1,486,000 (4.3%), TUC General Secretary Paul Nowak said:  

“The Tories are presiding over a rapidly deteriorating jobs market.  

“Unemployment and economic inactivity are shooting up. Over a million people are trapped on zero-hours contracts. And real wages are still worth less than in 2008. 

“Forget ‘green shoots' - everywhere you look the Conservatives are failing working people. 

“Our country is crying out for a proper economic plan for jobs and growth to make sure household incomes can recover and everyone is secure at work. 

“And our NHS desperately needs investment to get waiting lists back down. When people can access treatment faster, they will return to work sooner.” 

TUC analysis published yesterday (Monday) showed the number of women economically inactive as a result of ill- health has increased by more than 500,000 over last five years. 

The UK's economic slowdown last year has caused Britain's jobs recovery to falter, with its post-pandemic workforce shrinking by the equivalent by the equivalent of one million workers. But this hasn't yet fed through into pay packets, with real wages growing at their fastest in rate in over two years, the Resolution Foundation said today (Tuesday).

While most major economies have already surpassed their pre-pandemic employment rates, the UK's employment recovery has been flat or falling for the past six months, and the current 16-64 employment rate of 74.5 per cent is closer to the pandemic employment low of 74.1 per cent than the pre-pandemic rate of 76.2 per cent. Britain's post-pandemic workforce has shrunk by the equivalent of one million workers.

This employment fall isn't just about lower participation – demand from employers is also weakening. Vacancies continue to fall, and unemployment has risen in the past four months, rising 0.5 percentage points to its current rate of 4.3 per cent. The number of employee jobs in HMRC's PAYE data has fallen for three months in a row.

However, the fall in employment has not yet fed through into pay packets, with real wages growing at a healthy rate of 2 per cent in the twelve months to March 2024 – the fastest growth since September 2021.

In fact, real wages have grown almost as much as in the past twelve months as they have done over the previous 16 years in total (2.1 per cent between February 2008 and February 2024).

Nye Cominetti, Principal Economist at the Resolution Foundation, said:

“Britain's jobs recovery continues to falter, with the workforce shrinking by the equivalent of one million workers since pre-pandemic times. This worrying employment fall shows the damage that an economic slowdown can cause.

“The news for those in work is more positive however, with real wages growing almost as much over the past 12 months as they did in the 16 years prior to this.

“The big question is whether the UK's recent economic recovery will boost employment and raise output per worker, which will be needed to sustain its mini pay recovery.”