UK unemployment rate rises as pay growth slows
Important Headlines
- UK unemployment rises to 4.3%
- Pay growth including bonuses rose from 3.8% to 4.3%
UK Unemployment Rate Rises
The UK’s jobs market has shown further signs of cooling after a rise in unemployment in September while pay growth slowed.
Figures from the Office for National Statistics (ONS) show the rate of unemployment rose to 4.3% in the three months to September, up from 4% the previous quarter.
While the ONS warned its jobs market figures should be treated with caution amid data collection issues, there were broader signs of a slowdown from separate figures showing the number of employees on company payrolls fell by 9,000 over the quarter. Vacancies also fell for a 28th consecutive month to the lowest level since May 2021.
Highlighting a further slowdown in the jobs market, annual growth in employees’ average regular earnings, excluding bonuses, in Great Britain eased to 4.8% in the three months to September, down from 4.9% in the three months to August.
However, the rate of pay growth remains significantly above inflation, which dropped to 1.7% in September, helping households to rebuild their finances after the biggest hit to living standards in decades.
Pay growth including bonuses also rose from 3.8% to 4.3%, although this was largely due to one-off civil service payments.
Matthew Percival, of the CBI lobby group, said: “The labour market continues to split with signs of employers’ weakening intentions to hire at the same time as a welcome fall in inactivity.
“These figures come against a backdrop of rising concern about spiralling employment costs which are set to increase following last month’s NICs rise, the employment rights bill and the latest increase in the national living wage.”
Glossary
Average weekly earnings
Average weekly earnings measure money paid by employers to employees in Great Britain before tax and other deductions from pay. The estimates are not just a measure of pay rises, because they also reflect, for example, changes in the overall structure of the workforce.
More high-paid jobs in the economy would have an upward effect on the earnings growth rate.
Economic inactivity
People not in the labour force are not in employment but do not meet the internationally accepted definition of unemployment. This is because they have not been seeking work within the last four weeks or they are unable to start work in the next two weeks. The economic inactivity rate is the proportion of people aged between 16 and
64 years who are not in the labour force. The Labour Force Survey estimates are official statistics in development.
Employment
Employment measures the number of people in paid work or who had a job that they were temporarily away from (for example, because they were on holiday or off sick). This differs from the number of jobs because some people have more than one job. The employment rate is the proportion of people aged between 16 and 64 years who are in employment. The Labour Force Survey estimates are official statistics in development.
Unemployment
Unemployment measures people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks. The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (people in work and those seeking and available to work) who are unemployed. The Labour Force Survey estimates are official statistics in development.
Claimant Count
The Claimant Count is an official statistic in development that measures the number of people who are receiving a benefit principally for the reason of being unemployed. Currently, the Claimant Count consists of those receiving Jobseeker’s Allowance and Universal Credit claimants in the “searching for work” conditionality group.