The UK unemployment rate has fallen to 4.9%, according to the Office for National Statistics (ONS), providing a boost to the government. However, the number of job vacancies continues to drop, indicating a mixed picture for the labour market.
Unemployment Rate Drops
The figure for February to April marked a decline from 5% in the first three months of the year. This drop occurred despite the number of people claiming out-of-work benefits rising to an estimated 1.72 million in May.
Vacancies Continue to Fall
The estimated number of job vacancies fell by another 19,000 to 707,000, the lowest level since April 2021. This suggests that firms are becoming more cautious about hiring new staff.
Wage Growth Remains Steady
Average wage growth stayed steady at 3.4% between February and April, or 4.4% including bonuses. For a typical worker, pay is rising roughly in line with or just above inflation.
ONS Director of Economic Statistics Liz McKeown said: “The labour market remained broadly stable in the latest quarter, with further softening evident in some measures. Payroll numbers continued to fall, with new recruits at their lowest level in five years. However, overall employment was little changed, with some signs of workers moving into self-employment.”
She added: “Vacancies also continued to fall, further suggesting that firms are becoming more cautious about taking on new staff. The decline has been most persistent among lower-paying sectors and smaller employers, although the largest fall this quarter was in professional services.”
“Meanwhile, regular wage growth in the private sector slowed to its lowest rate in five and a half years, though total earnings are growing faster because bonus payments in March and April are higher than a year ago, particularly in the financial sector. Public sector pay growth increased but is once again affected by the timing of pay awards varying this year.”
The data comes as the Bank of England votes later today on whether to change its base rate from 3.75%. Most economists expect the rate to remain on hold.
