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Highest unemployment rate in two years

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image credit:the independent

This month’s figures continue to show signs that the labor market may be cooling, with the number of vacancies still falling and unemployment rising. However, earnings growth remains relatively strong,” according to the ONS.
The ONS reported 6% annual growth in regular earnings, excluding bonuses, unchanged from the prior month.
When inflation is removed, wages rose 2.9% annually, the most since August 2021.
Economists expected salaries to rise after the April National Living Wage boost. Over-21s paid £11.44 an hour, up 9.8% from last year.
Due to its tiny survey sample, the ONS advises caution about unemployment estimates. Still, recent employer payroll figures show the number of employees declined by 36,000 between March and April and continued to shrink in May.
Job openings declined from 9,000 to 904,000.
The ONS reported that 22.3% of UK working-age adults—more than nine million—are not actively seeking work.
Since the epidemic, adult inactivity has remained high, causing concerns about job shortages in the UK economy.
Long-term illness is to blame for the figure reaching its highest point since 2015. It’s the top reason working-age individuals have been economically inactive since 2022.

image credit: the statistica

Chart illustrating the UK’s unemployment rate since early 1971, climbing to 4.4% in recent months.

The Bank will consider interest rates next week, but KPMG’s chief economist, Yael Selfin, said the “mixed” data was “unlikely to shift the dial at the Bank of England” and predicted no change this month.
She attributed lower staff demand “to a lack of roles and firms delaying hiring decisions..”
Luke Bartholomew, Abrdn’s deputy chief economist, said: “UK wage growth is high, but this data is unlikely to change the Bank of England’s mind given the cooling labor market.
“We expect the first rate cut in August, but that is dependent on further progress on bringing down underlying inflation pressure over the next few months,” he said.
Our record on employment is solid,” he said.
Today’s numbers show that the Tories have no hiding place after 14 years of catastrophic failure, said Labour’s shadow work and pensions secretary Liz Kendall.
Liberal Democrat Treasury spokesperson Sarah Olney said: “This Conservative carousel of chaos has our economy on a rollercoaster, and the British people are sick and tired of it.”
A Green Party spokesperson said rising unemployment “combined with decaying public services  is a fitting but tragic testament to a government that is out of touch and out of time.”.
Wales had the highest economic inactivity and lowest employment rates, which Plaid Cymru called “a damning indictment both on the Conservatives at Westminster and Labour in Wales.”

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