Labour Market Insights
The newly released labour market statistics indicate that nearly 33 million people are currently in work in the UK. Although the number of unemployed people has risen slightly since the previous quarter, the employment rate has continued to grow and now stands at a record 76.5% of the working age population, with an additional 270,000 people in work in comparison with the same period last year.
The growth in full-time employment appears to be driven by an 11.2 percentage point increase in female full-time self-employment over the past year. This amounts to 140,000 more women in self-employment, or a 5.4 percentage points increase, compared with the previous quarter.
The UK’s earnings had been on an upward trajectory since 2017, and the April to June 2019 quarter saw the UK’s highest growth in nominal pay rates since the 2008 recession, reaching 4.0% for total pay and 3.9% for regular pay. However, towards the end of 2019, growth began to level off, and for November 2019 to January 2020, growth had fallen to 3.1% for total and regular pay. Pay is still growing faster than inflation.
The ONS data on hours showed that from November to January, there were 4.6 million fewer hours worked than in the August to October 2019 quarter. A closer look reveals that the largest decline in hours has taken place among men, who account for 6.2 million fewer hours worked. In contrast, women increased their hours worked by 1.6 million over the same time period. This could point to labour market slack or underemployment, in which there are fewer hours for part-time and zero-hour contract workers who would like, if given the option, to work more hours.
This week’s data release covers the three months to January 2020, and so ends just as early cases of the coronavirus were identified. As a result, it we’ll be closely following further announcements and data releases to understand the potential impacts of the health crisis on the labour market.
The graph below shows a steady increase in the UK employment rate between 2012 and 2020.