1. Headline indicators

Employment in February 2024 fell by 141,000 on the previous month and fell by 179,000 on the September-November 2023 quarter, to 31,556,000. The employment rate for those aged 16-64 fell to 74.5%, from 75.0% in the last quarter.

Economic inactivity for those aged 16-64 went up by 150,000 on the previous quarter to 9.4 million. The economic inactivity rate went up to 22.2% from 21.9% in the last quarter.

Unemployment (for those aged 16-64) went up by 72,700 compared with the previous quarter to 1.4 million. The unemployment rate rose to 4.3% from 4.0% in the previous quarter.

2. Nominal pay rises continue to outstrip inflation, but are starting to fall

The latest data show average regular earnings grew by 6.0% in the year to February 2024, down from 6.1% in January 2024 and the post-pandemic peak of 7.9% in August 2023. For public sector workers average regular earnings grew by 6.1% in the year to February 2024, while average regular earnings grew by 6.0% for private sector workers. After taking account of inflation, real regular earnings went up by 1.9% (3-month average change) in the year to February 2024, with the single month data for February showing a real-terms increase of 2.1% over the year.

The rate of inflation has been falling since May 2023 and stood at 3.8% in February 2024. In the year to February 2024 core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.8%, less than the increase seen in the year to January 2024 (5.1%). Inflation in areas like Food and non-alcoholic beverages, Health, Communication and Restaurants and hotels is still very high and inflation in the UK remains above that in other similar countries in the G7. The United States is currently experiencing an inflation rate of 3.5% while the Eurozone average is 2.6%. Weak growth since the global financial crisis means average earnings are around £12,000 per year lower than if pre-crisis trends had continued.

3. There are fewer potential workers for employers to recruit, with 966,000 fewer over 50s in the labour market since the pandemic started

Recruitment has been more challenging for employers since the pandemic because of rises in economic inactivity – people leaving the labour market. The number of people aged 50 to 64 who are economically inactive has increased by 9.7% since the pandemic started.

Economic inactivity has started to rise in recent months, with the rate standing at 22.2% for those aged 16-64 in December 2023 to February 2024 – up from 21.9% in the previous quarter. Overall, the number of those aged 16 to 64 who are economic inactive is 853,000 higher than pre-pandemic, yet only one in ten out-of-work older people and people with a disability get employment support each year. The Government needs to extend employment support to more people outside the labour market and employers need to think about recruitment and job design to attract and retain staff.

4. The proportion of 18- to 24-year-olds not in employment or full-time education has risen over the past year

The unemployment rate for young people aged between 16 and 24 in the December 2023 to February 2024 quarter was 12.8%, 1.5 percentage points higher than the rate in the same quarter one year earlier (11.3 per cent). The number of young people aged between 16 and 24 who are not in employment or full-time education currently stands at 1,101,000. Whilst the percentage of those aged 16 to 17 who were not in employment or full-time education fell from 9.5% in December 2022 to February 2023 to 8.6% one year later, the percentage of 18- to 24-year-olds who were not in employment or full-time education rose from 17.0% to 17.4% over the same period. Our Youth Opportunity Index gives a detailed portrait of the opportunities and challenges for every young person broken down by local education authority.

5. Vacancies are fairly static, but 1.7 million economically inactive want a job

Headline vacancies in the January 2024 to March 2024 quarter were up by 6,000 on the previous month, at 916,000, but 13,000 lower than in the previous quarter. The headline ONS vacancy figure is both seasonally adjusted and a three-month average. Using the official measure of unemployment, there are 1.6 unemployed people for every vacancy. However, there are an additional 1.7 million people who are economically inactive but want a job. Extending employment support to this group would potentially ease recruitment pressures for employers.

6. Numbers claiming unemployment-related benefits continue to exceed the ILO measure of unemployment

Unemployment in the December 2023 to February 2024 quarter was 1,440,000. The quarterly headline figure has risen by 85,000 since the September to November quarter of 2023, and is up by 67,000 from last month’s published level. The experimental single-month estimate showed a rise in unemployment of 103,000 between February 2024 and March 2024. The ONS figure for claimant unemployed is 1,583,000, up by 10,900 on last month. The number of unemployed people who are claiming unemployment-related benefits is now 143,000 higher than the number unemployed on the official measure.

7. Unemployment rate much higher for young people than for those aged 25+

The 16- to 24-year-old unemployment rate (including students) was 12.8% of the economically active in the December 2023 to February 2024 quarter. The rate for those aged 25 to 49 was 3.3%. For those aged 50 and over it is 2.5%. Compared with the previous quarter the unemployment rate has risen by 0.34 percentage points for 16- to 24-year-olds, 0.27 percentage points for 25- to 49-year-olds and 0.29 percentage points for those aged 50 or more.

8. Long-term unemployment rising for those aged 25+

Youth long-term unemployment (which can include students) up by 33,600 over the last quarter and stood at 173,000 in the December 2023 to February 2024 quarter. Long-term unemployment for young people is normally counted as being unemployed for six months or more. Adult long-term unemployment on the survey measure was 244,000 in the December 2023 to February 2024 quarter. The number of people aged 25 and over out of work for 12 months was 71,200 higher in the most recent quarter than in the previous quarter (September to November 2023).