1. Headline indicators

Employment in May 2024 rose by 37,600 on the previous month and fell by 21,000 on the December-February 2024 quarter, to 31,535,000. The employment rate for those aged 16-64 fell slightly to 74.4%, from 74.5% in the last quarter.

Economic inactivity for those aged 16-64 fell by 20,700 on the previous quarter to 9.38 million. The economic inactivity rate fell slightly to 22.1% from 22.2% in the last quarter.

Unemployment (for those aged 16-64) went up by 85,500 compared with the previous quarter to 1.49 million. The unemployment rate rose to 4.5% from 4.3% in the previous quarter.

2. Nominal pay rises continue to outstrip inflation

The latest data show average regular earnings grew by 5.7% in the year to May 2024, down from 6.0% in April 2024 and down from the post-pandemic peak of 7.9% in August 2023. For public sector workers average regular earnings grew by 6.4% in the year to May 2024, while average regular earnings grew by 5.6% for private sector workers. After taking account of inflation, real regular earnings went up by 2.5% (3-month average change) in the year to May 2024, with the single month data for May showing a real-terms increase of 2.3% over the year.

The rate of inflation has been falling since May 2023 and stood at 2.8% in June 2024. In the year to June 2024 core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.2%, the same as the increase seen in the year to May 2024. Inflation in areas like Owner occupiers’ housing costs, Health, Recreation and culture, Education, and Restaurants and hotels is still high. The United States is currently experiencing an inflation rate of 3.0% while the Eurozone average is 2.5%. 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 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 50-64 who are economically inactive has increased by 11.5% since the pandemic started.

Economic inactivity has fallen very slightly over the most recent quarter, with the rate standing at 22.1% for those aged 16-64 in March to May 2024 – down from 22.2% in the previous quarter. Overall, the number of those aged 16-64 who are economic inactive is 833,000 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 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 March to May 2024 quarter was 13.9%, 2.4 percentage points higher than the rate in the same quarter one year earlier (11.4%). The number of young people aged between 16 and 24 who are not in employment or full-time education currently stands at 1,116,000.

The percentage of those aged 16-17 who were not in employment or full-time education was higher in March to May 2024 compared with the same quarter one year earlier (8.0% and 7.3% respectively). Over the same period the percentage of 18-24-year-olds who were not in employment or full-time education rose from 16.2% to 17.8%. 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 gradually falling, but 1.8 million economically inactive want a job

Headline vacancies in the April to June 2024 quarter were down by 16,000 on the previous month, at 889,000, and 30,000 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 1.7 unemployed people for every vacancy. However, there are an additional 1.8 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

From those aged 16 or more, unemployment in the March to May 2024 quarter was 1,528,000. The quarterly headline figure has risen by 88,000 since the December 2023 to February 2024 quarter, and is up by 17,000 from last month’s published level. The experimental single-month estimate showed a rise in unemployment of 35,000 between April and May 2024. The ONS figure for claimant unemployed is 1,662,000, up by 32,000 on last month. In May 2024 the number of unemployed people who were claiming unemployment-related benefits was 102,000 higher than the number unemployed on the official measure.

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

The 16-24-year-old unemployment rate (including students) was 13.9% of the economically active in the March to May 2024 quarter. The rate for those aged 25-49 was 3.4%. For those aged 50 and over it is 2.5%. Compared with the previous quarter the unemployment rate has risen by 1.1 percentage points for 16-24-year-olds, 0.1 percentage points for 25-49-year-olds and is unchanged for those aged 50 or more.

8. Long-term unemployment rising across the age ranges

Youth long-term unemployment (which can include students) is up by 20,000 over the last quarter and stood at 193,000 in the March to May 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 256,000 in the March to May 2024 quarter. The number of people aged 25 and over out of work for 12 months was 11,000 higher in the most recent quarter than in the previous quarter (December 2023 to February 2024).