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GB: Labour Market Report
| Actual | Previous | Revised | |
| Claimant Count - M/M | 31.2 | 26.5 | 8.3 |
| Claimant Count Unemployment Rate | 4.5% | 4.4% | |
| ILO Unemployment Rate | 4.9% | 5.0% | |
| Average Earnings - Y/Y | 4.4% | 4.1% | 4.4% |
Highlights
The latest UK labour market data suggests that the labour market that is gradually losing momentum, despite remaining broadly resilient. Payrolled employment continued to decline, falling by 138,000 over the year to April 2026 and 53,000 over the month, while provisional data suggest employment levels were largely unchanged over the month to May, increasing just by 2,000 (0.0 percent) to 30.3 million. Although these early estimates should be interpreted cautiously due to seasonal revisions and data volatility, the direction of travel points towards softer labour demand.
Labour market slack is becoming more evident. Vacancies fell to 707,000, their lowest level since early 2021, while the Claimant Count rose to 1.712 million over the month and year, signalling increasing pressures on job seekers. At the same time, the unemployment rate increased to 4.9 percent compared with a year earlier, although it eased slightly from the previous quarter. The employment rate remained stable at 75.0 percent, suggesting employers are retaining workers but hiring activity has weakened.
A notable feature of the report is the divergence between employment and earnings. Nominal wage growth remained relatively robust, with regular pay increasing by 3.4 percent and total pay by 4.4 percent. However, after adjusting for inflation, real earnings growth was marginal, indicating that household purchasing power is improving only slowly. Stronger public sector pay growth, partly influenced by the timing of pay settlements, continues to outpace private sector earnings.
To summarise, the latest report suggests the UK labour market is transitioning from a period of post-pandemic tightness towards a more balanced but weaker environment. Falling vacancies, declining payroll employment, and rising claimant numbers point to cooling demand for labour, while modest real wage gains and stable employment rates provide some support to household incomes and broader economic activity.
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.