The Office for National Statistics (ONS) has released its September analysis of the UK Labour Market, which has seen unemployment fall to its lowest level since 1974.
The UK unemployment rate now stands at just 3.6%, its lowest level recorded since May to July 1974. Despite this, the employment rate remains below pre-pandemic figures at 75.4%, a 0.2 point fall on previous figures, with those who are economically inactive (including students and those unable to work due to poor health) rising slightly over the three month period to the end of August 2022.
Alongside the fall in unemployment, the number of open vacancies recorded by the ONS also fell slightly to 1.266 million jobs advertised during the period June-August 2022, falling by 34,000 but remaining at an extremely elevated level following the Covid-19 pandemic and Brexit.
Growth in average weekly pay (excluding bonuses) also rose in June-August 2022 by 5.2%, a slight increase on last month’s UK Labour Market report; however, the ONS also found that when inflation, currently in excess of 10%, was factored into calculations, workers had experienced a 2.8% fall in the value of their pay packets.
This squeeze on incomes will be felt most severely by public sector workers, who only saw a 2% increase in average pay, compared to 6% for the private sector. The retail and hospitality sectors both reported the largest growth rate of earnings at 7.0%, followed by professional services and construction.
