| Actual | Previous | Revised | Consensus | Consensus Range | |
|---|---|---|---|---|---|
| Claimant Count - M/M | 22.0 | 700 | |||
| Claimant Count Unemployment Rate | 4.6% | 4.6% | 4.5% | ||
| ILO Unemployment Rate | 4.4% | 4.4% | 4.5% | 4.4% to 4.5% | |
| Average Earnings - Y/Y | 5.6% | 5.6% | 5.2% | 5.9% | 5.9% to 5.9% |
Highlights
Despite a year-over-year rise of 95,000 (0.3 percent) in payrolled employees in December 2024, recent trends indicate a downturn, with monthly decreases in both November (32,000) and December (47,000), suggesting emerging economic uncertainties.
The employment rate (74.8 percent) remained steady over the year but saw a quarterly decline, aligning with a rise in unemployment (4.4 percent). Economic inactivity (21.6 percent) continued its downward trend, hinting at gradual workforce re-engagement. However, the Claimant Count increased by 22,000, reaching 1.750 million in January, reflecting growing pressure on jobseekers.
Vacancy numbers continued their 30-period decline, falling by 24,000 to 812,000, although they remained above pre-pandemic levels. This sustained reduction, alongside a rise in labour disputes, highlights underlying workforce tensions.
Earnings growth remained strong at 5.6 percent, with real-term increases (2.5 percent for regular pay) outpacing inflation. This signals resilient wage growth despite broader employment challenges. However, the ongoing volatility in labour force survey estimates necessitates cautious interpretation, reinforcing the need for a holistic approach using alternative indicators such as PAYE RTI and workforce job data. The latest update takes the RPI and RPI-P to 2, meaning that economic activities are generally within the consensus of the UK economy.
The employment rate (74.8 percent) remained steady over the year but saw a quarterly decline, aligning with a rise in unemployment (4.4 percent). Economic inactivity (21.6 percent) continued its downward trend, hinting at gradual workforce re-engagement. However, the Claimant Count increased by 22,000, reaching 1.750 million in January, reflecting growing pressure on jobseekers.
Vacancy numbers continued their 30-period decline, falling by 24,000 to 812,000, although they remained above pre-pandemic levels. This sustained reduction, alongside a rise in labour disputes, highlights underlying workforce tensions.
Earnings growth remained strong at 5.6 percent, with real-term increases (2.5 percent for regular pay) outpacing inflation. This signals resilient wage growth despite broader employment challenges. However, the ongoing volatility in labour force survey estimates necessitates cautious interpretation, reinforcing the need for a holistic approach using alternative indicators such as PAYE RTI and workforce job data. The latest update takes the RPI and RPI-P to 2, meaning that economic activities are generally within the consensus of the UK economy.
Market Consensus Before Announcement
The consensus looks for an uptick in unemployment to 4.5 percent as the economy continues to totter. Earnings are expected up to 5.9 percent on year.
Definition
The Labour Market Report covers a number of key areas of the jobs market. Unemployment is updated on the basis of two separate surveys: the claimant count, which measures the number of people claiming unemployment-related benefits, and the more reliable but lagging International Labour Organization's (ILO) measure that excludes jobseekers that did any work during the month and covers those people who are both looking and are available for work. Average earnings growth, a key determinant of inflation, is also updated.
Description
The labour market survey gives the most comprehensive report on how many people are looking for jobs, how many have them and what they are getting paid and how many hours they are working. These numbers are the best way to gauge the current state as well as the future direction of the economy.
The survey also provides information on wage trends, and wage inflation is high on the Bank of England's list of enemies. Bank officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Bank to maintain a more accommodative monetary policy. If inflation is a problem, the Bank is limited in providing economic stimulus - it must stay within range of its mandated inflation target.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it is a reasonable bet that interest rates will have to rise and bond and stock prices will fall. In contrast, when jobs growth is slow or negative, then interest rates are more likely to decline - boosting bond and stock prices in the process.
The survey also provides information on wage trends, and wage inflation is high on the Bank of England's list of enemies. Bank officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Bank to maintain a more accommodative monetary policy. If inflation is a problem, the Bank is limited in providing economic stimulus - it must stay within range of its mandated inflation target.
By tracking the jobs data, investors can sense the degree of tightness in the job market. If wage inflation threatens, it is a reasonable bet that interest rates will have to rise and bond and stock prices will fall. In contrast, when jobs growth is slow or negative, then interest rates are more likely to decline - boosting bond and stock prices in the process.
