After a slow-growing year, wages are increasing faster than expected. This is according to the data released today (17th December).
The Office for National Statistics’ (ONS) figures showed that the average annual increase in employee earnings in the three-month period ending October 2024 was 5.2%.
The Labour Market Overview, UK: Dec 2024, published in the same time period, showed that the UK employment rates for 16-64-year-olds were largely unchanged compared to last year at 74.9% but higher than the previous quarter.
In the three-month period ending in October, the rate of unemployment among those 16 and older was expected to be 4,3%. This is higher than the previous year as well as an increase over the previous quarter.
Liz McKeown, ONS’s director of economic statistics, commented on the figures: “After a steady slowdown for more than a year now, the growth in pay, excluding bonuses, increased slightly in the most recent period, driven primarily by accelerated growth in the private sector.” The growth in pay including bonuses was higher, but it reflects the previous figures that were affected by one-off payments to certain public sector employees made in 2023.
The estimated payroll staff increased by 140,000 (0.5%) between September and October.
The number of salaried workers decreased by 22,000 (0.1%), but increased by 160,00 (0.5%) in comparison to the same period last year.
Mc Keown said: “The number on payrolls increased slightly in October. However, we’ve seen the annual growth rate continue to slow down, showing that our latest data from employers shows a consistent trend.” The number of job openings has also decreased, but the total is still a bit higher than before the pandemic.
She urged caution in interpreting the results due to difficulties with the collection of the figures, and until the improvements made to the survey have been fully implemented.
Jack Kennedy, senior economist at global hiring platform Indeed, said: “Stronger-than-expected wage growth underlines the quandary facing Bank of England rate setters. The labour market is in a fragile and cooling state as it heads into 2025. However, wage growth remains high and sticky. It also exceeds the Bank of England’s inflation target.
The data quality issues, he says, “continue to cloud the waters” on underlying dynamics. This is particularly true on the supply side.
ONS data showed that the number of vacancies dropped by 31,000 in the last quarter, to 818,000 for November 2024. This is the 29th consecutive drop, but still above pandemic levels.
Indeed figures show that job postings have continued to fall into early December. This includes low-paid positions such as retail and hospitality.
Julia Turney said, “Economically, much has changed since the last announcement of unemployment, but these latest figures serve as a reminder that there is still a long road ahead.”
Businesses across the country have been forced to freeze hiring or even cut jobs due to the new, costly changes announced by the Autumn Budget.
She stated that the whitepaper Get Britain Working Again and the investment of PS24 million to combat ill health, inactivity and obesity offer some hope but that the real proof will come in the actions taken to achieve it.
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