EconomyNews

UK labour market sees recovery as unemployment falls to 4.1%

Growth in average total pay, including bonuses, was up 4.3% among employees in October to December 2021, although this is a drop in real terms

The UK labour market has seen “continuing recovery” as the unemployment rate decreased by 0.2% on the quarter to 4.1%, and employment rates increased by 0.1% in November 2021 to January 2022 to 75.5%.

According to the Office for National Statistics (ONS), the ratio of vacancies to every 100 employee jobs reached a record high of 4.3% as the majority of industry sectors displayed “record high ratios”. However, the economic inactivity rate increased by 0.1% to 21.2%.

The increase in economic inactivity since the start of the Covid-19 pandemic was reportedly driven by those who are economically inactive because they are students or for “other” reasons.

Additionally, growth in average total pay, including bonuses, was up 4.3% and growth in regular pay, excluding bonuses, was up 3.7% among employees in October to December 2021. However, in real terms, total and regular pay fell on the year at negative 0.1% for total pay and negative 0.8% for regular pay.

This compares with 4.2% and 3.8% in last month’s readings and ahead of the consensus among economists of 3.8% and 3.6% rises respectively.

Meanwhile, the number of self-employed workers remains low following decreases seen during the pandemic, however the number of employees increased on the quarter to a “record high”.

Overall, the number of job vacancies in November 2021 to January 2022 rose to a new record of 1,298,400, up by 513,700 from its pre-Covid levels in January to March 2020.

In addition, the number of payrolled employees has seen a monthly increase of 108,000 in January 2022 to a record 29.5 million.

Sam Beckett, ONS head of economic statistics, said: “Our Labour Force Survey shows the number of people in employment overall is well below where it was before Covid-19 hit. This is because there are now far fewer self-employed people.

“However, over the same period, nearly 400,000 people, mostly the over-50s, have disengaged from the world of work altogether and are neither working nor looking for a job.”

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