Economic Review on Employment

Following the release of the ONS Statistics in September, we review key findings and how this impacts employment in the UK.

Employment rate

Employment rates across the UK have been relatively high recently, and the most recent figures support this statement. The employment rate for May to July 2022 for people aged between 16-64 years 75.4%, which was 0.2% lower than the previous period.

Unemployment rates

Despite the employment rate falling slightly between May – July, this was not the case for the unemployment rate, which has fallen to just 3.6% for the same period – that’s the lowest rate since 1974. In addition to that, the number of people unemployed for up to 6 months has fallen to a record a low, with the figure for those unemployed for over 12 months decreasing too. The only unemployment rate that increased was for those not in work for between 6-12 months across the UK.

The economy

How has the economy been impacted? With the rate of unemployment falling, it’s expected that it would have a positive impact on the economy – this did not appear to be reflected. The economic inactivity rate increased to 21.7% for May – July 2022 and it is thought that major factors contributing to this was due to both the number of students and those with long-term sickness across the UK increasing, having a negative impact on spending habits.

The job market

What did the last figures tell us about the job market? Well, the number of job vacancies across the UK fell to 1,266,000 from June to August 2022 – that’s a decrease of 34,000. In addition to this, the total number of people in Workforce Jobs across the UK also rose by 290,000 to a record high of 35.8 million in June 2022. The most timely estimate for payrolled employees also increased by 71,000 from July to August 2022, rising to a record high of 29.7 million.

Financial figures

We’ve analysed figures across employment and identified the economic impact this has had, but what do the financial figures tell us? It was found that the growth in regular pay excluding bonuses for employees across the UK was 5.2% from May to July 2022. If we factor in bonus payments, the average total pay increase was 5.5% for the same period.

The latest figures from the ONS suggest that despite the energy crisis, things are moving in the right direction for the UK. As Liz Truss, the new Prime Minister has announced the Energy Price Guarantee for families and businesses in an attempt to reform the broken energy market, only time will tell how much of an impact this will have in the coming months. With the upcoming mini-budget on 23rd September, it will be interesting to see what the focus is for government moving forward.