1. Headline indicators

Employment in March 2024 fell by 5,000 on the previous month and fell by 203,000 on the October-December 2023 quarter, to 31,552,000. 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 104,000 on the previous quarter to 9,383,000. The economic inactivity rate went up to 22.1% from 21.9% in the last quarter.

Unemployment (for those aged 16-64) went up by 143,000 compared with the previous quarter to 1,445,000. The unemployment rate rose to 4.4% from 3.9% in the previous quarter.

2. Nominal pay rises continue to outstrip inflation

The latest data show average regular earnings grew by 6.0% in the year to March 2024, unchanged from January 2024 and down from the post-pandemic peak of 7.9% in August 2023. For public sector workers average regular earnings grew by 6.3% in the year to March 2024, while average regular earnings grew by 5.9% for private sector workers. After taking account of inflation, real regular earnings went up by 2.0% (3-month average change) in the year to March 2024, with the single month data for March showing a real-terms increase of 2.3% over the year.

The rate of inflation has been falling since May 2023 and stood at 3.8% in March 2024. In the year to March 2024 core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.7%, slightly less than the increase seen in the year to February 2024 (4.8%). Inflation in areas like Food and non-alcoholic beverages, Clothing and footwear, Health, Communication, Recreation and culture and Restaurants and hotels is still very high and inflation in the UK remains above that in other G7 countries. The United States is currently experiencing an inflation rate of 3.9% while the Eurozone average is 2.4%. 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 984,000 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 10.5% since the pandemic started.

Economic inactivity has started to rise in recent months, with the rate standing at 22.1% for those aged 16-64 in January 2024 to March 2024 – up from 21.9% in the previous quarter. Overall, the number of those aged 16 to 64 who are economic inactive is 832,000 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. Quarterly data on employment rates by ethnic group and by disability show substantial differences remain between groups

In the January to March quarter of 2024 the difference between the employment rates of people from a Pakistani, Bangladeshi or Black background or from Mixed/multiple ethnic groups and the employment rate of people from a White background narrowed compared with the same quarter in 2023. By contrast, the size of the gap between the employment rates of those from a White background and those from a Chinese background or from Other ethnic groups increased over this period. People from an Indian background are more likely to be employed than those from a White background and the size of this difference has increased over the past year.

As the figures on employment rates for different ethnic groups are not seasonally adjusted, patterns vary from quarter to quarter and the reweighting of the Labour Force Survey from the July to September quarter of 2022 onwards creates a discontinuity which makes it difficult to compare employment rates over a longer period of time. However, for most ethnic groups the gap in employment rates compared with those from a White background appears to have narrowed over the past 10 years.

The employment rate for people with a disability has generally been on an upward trajectory over the past 10 years. In the January to March quarter of 2024, 52.9% of people with a disability were employed, almost the same as the percentage employed one year earlier (53.0%). The difference in the employment rates of people with a disability and those without a disability has narrowed over time but remains substantial. In January to March 2024, the employment rate for people with a disability was 28.8 percentage points lower than the employment rate for those without a disability (81.7%).

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 January to March 2024 quarter was 13.0%, 1.4 percentage points higher than the rate in the same quarter one year earlier (11.6%). The number of young people aged between 16 and 24 who are not in employment or full-time education currently stands at 1,126,000.

The percentage of those aged 16 to 17 who were not in employment or full-time education rose from 7.9% in January to March 2023 to 8.6% one year later. Over the same period the percentage of 18- to 24-year-olds who were not in employment or full-time education rose from 16.4% 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.

6. Vacancies are gradually falling, but 1.7 million economically inactive want a job

Headline vacancies in the February to April 2024 quarter were down by 15,000 on the previous month, at 898,000, and 26,000 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.

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

Unemployment in the January to March 2024 quarter was 1,445,000. The quarterly headline figure has risen by 143,000 since the October to December quarter of 2023, and is up by 40,000 from last month’s published level. The experimental single-month estimate showed a fall in unemployment of 46,000 between February 2024 and March 2024. The ONS figure for claimant unemployed is 1,579,000, up by 9,000 on last month. In March 2024 the number of unemployed people who were claiming unemployment-related benefits was 125,000 higher than the number unemployed on the official measure.

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

The 16- to 24-year-old unemployment rate (including students) was 13.0% of the economically active in the January to March 2024 quarter. The rate for those aged 25 to 49 was 3.4%. For those aged 50 and over it is 2.7%. Compared with the previous quarter the unemployment rate has risen by 1.5 percentage points for 16- to 24-year-olds, 0.2 percentage points for 25- to 49-year-olds and 0.6 percentage points for those aged 50 or more.

9. Long-term unemployment rising across the age ranges

Youth long-term unemployment (which can include students) is up by 68,000 over the last quarter and stood at 190,000 in the January to March 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 January to March 2024 quarter. The number of people aged 25 and over out of work for 12 months was 50,000 higher in the most recent quarter than in the previous quarter (October to December 2023).