1. Headline indicators

Employment in February 2025 rose by 48,000 on the previous month and by 159,000 on the September-November 2024 quarter, to 32,390,000. The employment rate for those aged 16-64 rose to 75.1% from 74.9% in the previous quarter.

Economic inactivity for those aged 16-64 fell by 82,000 on the previous quarter to 9.22 million. The economic inactivity rate fell to 21.4% from 21.6% in the last quarter.

Unemployment for those aged 16-64 went up by 12,000 compared with the previous quarter to 1.53 million. The unemployment rate remained the same as the previous quarter at 4.5%.

To explore how key labour market indicators have changed over the past 10 years, see our interactive labour market dashboard.

2. Divergence between the Labour Force Survey and other sources in recent years

Our headline indicators are based on data from the Labour Force Survey, but since the pandemic this has experienced a decline in the response rate which affects the reliability of estimates from this source. This is illustrated by the divergence in the employment rate estimated from the LFS and other sources over this period. While the ONS seeks to resolve these issues, we are publishing an experimental estimate of the employment rate based on an approach developed by the Resolution Foundation and using administrative data sources, such as HM Revenue and Customs payroll and self-assessment data on the numbers of people self-employed. This measure indicates that in the December 2024-February 2025 quarter the employment rate for those aged 16-64 stood at 75.5%. This was 0.4 percentage points higher than the LFS estimate. We aim to refine this approach in the months ahead.

3. Nominal pay rises continue to outstrip inflation

The latest data show average regular earnings grew by 5.9% in the year to February 2025, almost unchanged on 5.8% in January 2025 and down from the post-pandemic peak of 7.9% in August 2023. For public sector workers average regular earnings grew by 5.7% in the year to February 2025, while average regular earnings grew by 5.9% for private sector workers. After taking account of inflation, real regular earnings went up by 2.1% (3-month average change) in the year to February 2025, with the single month data for February showing a real-terms increase of 2.0% over the year.

The rate of inflation fell from 3.9% in January 2025 to 3.7% in February 2025. In the year to February 2025 core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.4%, down on the 4.6% increase seen in the year to January 2025. The reduction in the rate of inflation was driven by a slight reduction in the magnitude of price rises for both good and services. The inflation rate for services fell from 5.8% in January 2025 to 5.7% in February, while the rate of inflation for goods declined from 1.0% to 0.8% over the same period.

Inflation in areas like Housing and household services, Owner occupiers’ housing costs, Communication and Education is still high. In February the UK shared the highest rate of inflation in the G7 with Japan, where the inflation rate was also 3.7%. The United States is currently experiencing an inflation rate of 2.4% while the Eurozone inflation rate is 2.2%. Weak growth since the global financial crisis means average earnings are around £12,000 per year lower than if pre-crisis trends had continued.

4. There are fewer potential workers for employers to recruit, with nearly 1 million 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 8.7% since the pandemic started.

Economic inactivity has fallen slightly in the most recent quarter, with the rate standing at 21.4% for those aged 16-64 in December 2024 to February 2025 – down from 21.6% in the previous quarter. Overall, the number of those aged 16-64 who are economic inactive is 779,000 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.

5. The proportion of 16- 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 2024 to February 2025 quarter was 14.6%, 1.7 percentage points higher than the rate in the same quarter one year earlier (12.8%). The number of young people aged between 16 and 24 who are not in employment or full-time education currently stands at 1,242,000. Furthermore, our recent research shows that three in five of these young people have never had a paid job.

The percentage of those aged 16-17 who were not in employment or full-time education was higher in December 2024 to February 2025 compared with the same quarter one year earlier (9.5% and 8.4% respectively). Over the same period the percentage of 18-to-24-year-olds who were not in employment or full-time education rose from 17.5% to 18.9%. Our Youth Opportunity Index gives a detailed portrait of the opportunities and challenges for every young person broken down by local education authority.

6. Signs of caution by employers, while 2.0 million people who are economically inactive want a job

Employers are required to give the Insolvency Service advanced notice of any plans to make 20 or more employees at a single establishment redundant by completing an HR1 form. This gives an estimate of potential redundancies before plans are finalised. The minimum notice period required ranges from 30 to 45 days, depending on the number of employees at risk of redundancy. While there is no advanced notice of most redundancies, information from the HR1 form does provides an early indicator of a possible change in the labour market. For example, a spike in potential redundancies in June 2020 was followed by a peak in the number of people made redundant in the September to November quarter of 2020.

In the January to March 2025 quarter potential redundancies stood at an average of 26,048 a month, a sizable increase on the monthly average of 20,250 over the previous quarter. This suggests that actual redundancies may rise in the coming months.

Headline vacancies in the January to March 2025 quarter were down by 25,000 compared with the previous quarter. The headline ONS vacancy figure is both seasonally adjusted and a three-month average. The downward trend in vacancies and rise in redundancies suggest employers are currently cautious about the state of the economy.

Using the official measure of unemployment, there are 2.0 unemployed people for every vacancy. However, there are an additional 2.0 million people who are economically inactive but want a job. People in this group will need to be supported to find work if the government is to achieve its ambition of an 80 per cent employment rate.

7. Numbers out-of-work and claiming unemployment-related benefits below the ILO measure of unemployment

From those aged 16 or more, unemployment in the December 2024 to February 2025 quarter was 1,574,000. The quarterly headline figure has risen by 14,000 since September to November 2024.

Under Universal Credit, people who are in employment, but on very low earnings are required to search for work. The administrative earnings threshold, below which claimants are required to engage in work search, has increased over time, bringing more employed people into the claimant count. At present, those making an individual claim for Universal Credit are required to look for better-paid work if they earn less than £952 during the month-long assessment period. Those claiming Universal Credit as part of a couple are obliged to look for better-paid work if their combined earnings are less than £1,534 in the assessment period.

Adjusting the claimant count to exclude those who are employed at some point during the month-long assessment period may understate the number of people who are unemployed and claiming out-of-work benefits on a particular day within that period. However, excluding employed claimants means the adjusted claimant count is more comparable with the official quarterly estimate of unemployment.

After excluding 327,328 individuals who were in very low-paid work at some point during the assessment period, 1,419,993 people were unemployed and claiming out-of-work benefits in February 2025. The number of people who were claiming unemployment-related benefits while out-of-work was 154,000 lower than the number unemployed on the official quarterly measure.

8. Unemployment rates fairly stable for older people but remain high for those aged 16-24

The 16- to 24-year-old unemployment rate (including students) was 14.6% of the economically active in the December 2024 to February 2025 quarter. The rate for those aged 25 to 49 was 3.2%. For those aged 50 and over it was 2.5%. Compared with the previous quarter the unemployment rate is almost unchanged for all age groups (up by 0.1 percentage points for 16- to 24-year-olds and no change for those aged 25 to 49 and those aged 50 or more). Compared with one year earlier, the unemployment rate for 16-to-24-year-olds was 1.7 percentage points higher in the December 2024 to February 2025 quarter, while it was virtually unchanged for those aged 25 to 49 (down by 0.1 percentage points) and for those aged 50 or more (no change).

9. Early signs youth long-term unemployment may be starting to plateau

Youth long-term unemployment (which can include students) is almost unchanged over the last quarter and stood at 219,000 in December 2024 to February 2025. It has risen by 37,000 over the past year. 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 218,000 in the December 2024 to February 2025 quarter. The number of people aged 25 and over out of work for 12 months or more was almost unchanged (1,000 higher) in the most recent quarter compared with the previous quarter (September to November 2024). Compared with the same quarter one year earlier, adult long-term unemployment has risen by 28,000.

10. The employment picture varies across the country

The smaller sample sizes underlying regional estimates of employment and economic inactivity mean that caution is needed in interpreting changes over time. However, employment rates in the December 2024 to February 2025 quarter were higher than the equivalent quarter one year earlier in Scotland, Wales, the South West, the East of England, the East Midlands and the North West. The South West of England saw the largest increase in the employment rate, at 2.4 percentage points. By contrast, employment rates in December 2024 to February 2025 were lower than they had been one year earlier in Northern Ireland, London and the North East. The fall in the employment rate over this period was greatest in Northern Ireland and London, where it declined by 1.4 percentage points. In the South East, West Midlands and Yorkshire and the Humber there was little change in the employment rate compared with one year earlier.

The rate of economic inactivity in the November 2024 to January 2025 quarter was lower than it was one year earlier in Scotland, Wales, the South West, the East of England and the North West. The reduction in economic inactivity was greatest in the East of England, where it fell by 2.7 percentage points over this period. In Northern Ireland and the West Midlands the rate of economic inactivity rose compared with one year earlier. The increase in the rate of economic inactivity was most pronounced in Northern Ireland, which saw a rise of 1.9 percentage points. In the South East, London, the East Midlands, Yorkshire and the Humber and the North East there was little change in the rate of economic inactivity compared with one year earlier. This varying picture, which is even greater at sub-regional level, shows the importance of tackling inequalities so everyone has a fair chance in life wherever they live.