ONS data shows employment rising and unemployment low

New data from the Office for National Statistics (ONS) shows that the UK labour market remains fairly robust, in spite of increasing economic pressure, with employment rising and unemployment low.

Its research shows that employment rose slightly in December 2022 (the latest month for which there is data), reaching 32.84 million, although this is still short of the 33.07 million seen just before the outbreak of Covid-19. The UK employment rate was estimated at 75.7% in November 2022 to January 2023, 0.1 percentage points higher than the previous three-month period. The increase in employment over the latest three-month period was driven by part-time employees and self-employed workers.

Average hours worked remains stable at 36 hours a week for full-time employees and 17 hours a week for part-timers. In December 2022 to February 2023, the estimated number of vacancies fell by 51,000 on the quarter to 1,124,000. Vacancies fell in the quarter for the eighth consecutive period, reflecting uncertainty across industries, as survey respondents continue to cite economic pressures as a factor in holding back on recruitment.

Jonathan Boys, senior labour market economist for the CIPD, the professional body for HR and people development, said: “Some measures suggest a cooling labour market. Vacancies continue to fall for the eight consecutive time indicating a softening of demand for staff, but unemployment remains incredibly low at 3.7% indicating there are fewer available candidates. This highlights the need for the chancellor's Budget to focus on a broad range of measures to boost labour market supply and help more people to get back into work.

“Pay is still rising but prices are rising faster and each month the cost-of-living crisis casts more gloom on family finances. Though inflation is coming down, prices still rose by 10.1%, eclipsing today’s figures, which show regular pay growing at 6.5%. A pattern that we are getting used to now is the gap between public and private sector pay. The former grew at just 4.8% while the latter grew by 7%. This will make recruitment and retention in the public sector harder as time goes on.

“Policymakers will be considering how to boost labour supply to ease shortages and ensure growth. Today’s stats show that although the economic inactivity rate decreased, it remains 1.1% higher than pre-pandemic. Policymakers should focus on boosting labour supply from all age groups, and there is an urgent need to reform the Apprenticeship Levy into a training and skills levy. This is reinforced by CIPD research, which finds that there are more 16-24-year-olds not working but who would like to work, than there are 50-64-year-olds, despite the latter being the focus of reducing economic inactivity. More funding is needed for apprenticeships for young people and increased flexibility for employers to train their existing workforce through other forms of training and development."

Significant vacancies

Kate Nicholls, UKHospitality chief executive, said: “The ongoing job creation by hospitality demonstrates our sector’s ability to be a real driver of growth and career opportunities, despite venues still being held back by significant vacancies.

“It’s encouraging that there’s a slight fall in vacancies but they remain stubbornly high, still 56% higher than pre-pandemic levels. These persistent shortages continue to force venues to reduce trading hours and days, impacting their growth potential.

“To fully harness what hospitality can offer to the nation and economy, we need to see government action at the Budget to tackle these ongoing vacancies. Commitments to reform the Apprenticeship Levy and make changes to the immigration system to make it easier to recruit would be a clear message that the government backs hospitality to power economic recovery.”