The UK’s unemployment rate has not changed, even as the UK economy is flattening as waves of people return to work, official figures show.
The UK unemployment rate stood at 3.7% in the three months to December, the same rate recorded in the three months to November, according to the Office for National Statistics (ONS).
However, the unemployment rate for the three months to September was 3.6%, slightly higher than the previous calendar quarter.
Data showed normal wage growth was 6.7% over the three months, the strongest rate of growth seen outside of the pandemic, according to the ONS.
This suggests that wage pressures continue to build on employers trying to meet wage demands as the cost of living rises.
Nevertheless, wages continued to be overtaken by rising prices.
Taking into account consumer price index (CPI) inflation, regular salaries fell by 3.6% over the three months compared to the previous year.
While this drop is smaller than the record 4.1% decline seen in the three months to June, it remains one of the biggest real wage declines since comparable records began in 2001. Yes, the ONS said.
In a sign that the labor market is slowing, the estimated number of vacancies fell by 76,000, marking the seventh consecutive decline.
According to ONS, this reflects economic pressure and uncertainty that companies are holding back on hiring.
Last week’s figures showed UK production flattening out in the final quarter of 2022, narrowly avoiding a recession, but stagnating growth ahead of what is expected to be a difficult year for the economy. This is after clarifying
The ONS added that 843,000 working days were lost in the December 2022 strike, the highest since November 2011.
There were also signs of a wave of people returning to work amid the cost of living crisis.Data showed a record high net flow of people moving into employment from the economic shutdown.
This was mainly driven by young people, students and the elderly aged 50 to 64, who experienced the greatest decline in inactivity.
The ONS therefore suggests that the extremely tight labor market seen after the pandemic, which saw record numbers of vacancies and severe staffing shortages, is beginning to ease.
Darren Morgan, Director of Economic Statistics, ONS, said:
“This means that while employment has risen again, the unemployment rate has also risen slightly.
“There is still a large gap between public and private sector earnings growth, which has narrowed slightly in recent periods. But overall, wages continue to be overtaken by higher prices.
“Although still at very high historically high levels, job openings are again declining, with a particularly sharp drop from smaller employers.
“Workdays lost to strikes spiked again in December. Transport and communications remained the hardest-hit sectors, but the health sector also made a significant contribution this month.”
Prime Minister Jeremy Hunt said of the unchanged unemployment rate:
“The best thing we can do to get people’s wages higher is to stick to our plan to halve inflation this year.”