Key points:
- Payrolled employment fell by 13,000 in July.
- Wage growth picked up slightly, with a large gap between public- and private-sector pay.
- The unemployment rate was 4.9% in the three months to June, while redundancy notifications remained low.
The latest data from the Office for National Statistics confirms a frozen labour market, one in which employers aren’t cutting jobs but have also become far more cautious about creating new ones – especially for first-time jobseekers. Payrolled employment is gradually slipping as consumer-facing sectors, including Retail and Hospitality, shed jobs faster than the public sector can create them. At the same time, vacancies have hit a five-year low (and their lowest since late 2014, outside of the pandemic).
Youth unemployment has climbed for almost four years as employers show they’re wary of taking a chance on anyone without a track record. It now stands at 16.2%, close to a 12-year peak, having climbed from a low of 9.3%. That compares with an overall unemployment rate that has dipped in recent months to just 4.9%.
Wage growth picked up slightly, with regular earnings up 3.5% annually in the three months to June. The gap between public and private sector pay growth remains wide, running at 6.1% in the public sector, partly reflecting NHS pay awards, against 2.8% in the private sector. Private-sector pay is what the Bank of England watches most closely, and its benign pace suggests inflation pressure is easing, pointing to rates staying on hold for now.
