1. Headline indicators

Employment in July 2024 rose by 125,000 on the previous month and rose by 239,000 on the February-April 2024 quarter, to 31,737,000. The employment rate for those aged 16-64 went up to 74.8% from 74.3% in the previous quarter.

Economic inactivity for those aged 16-64 fell by 136,000 on the previous quarter to 9.3 million. The economic inactivity rate fell to 21.9% from 22.3% in the last quarter.

Unemployment (for those aged 16-64) fell by 60,000 compared with the previous quarter to 1.4 million. The unemployment rate fell slightly to 4.2% from 4.4% in the previous quarter.
To explore how key labour market indicators have changed over the past 10 years, see our interactive labour market dashboard.

2. Nominal pay rises continue to outstrip inflation but the rate of increase is slowing

The latest data show average regular earnings grew by 5.1% in the year to July 2024, down from 5.4% in June 2024 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 July 2024, while average regular earnings grew by 4.9% for private sector workers. After taking account of inflation, real regular earnings went up by 2.2% (3-month average change) in the year to July 2024, with the single month data for July showing a real-terms increase of 1.9% over the year.

The rate of inflation has been falling since May 2023, although it increased from 2.8% in June 2024 to 3.1% in July. In the year to July 2024 core CPIH (excluding energy, food, alcohol and tobacco) rose by 4.1%, slightly lower than the 4.2% increase seen in the year to June 2024. This is driven by a rise in the price of services, which increased by 5.7% in the year to July 2024. By contrast, the price of goods fell by 0.5% over this same period. Inflation in areas like Owner occupiers’ housing costs, Health, Communication, Education, and Restaurants and hotels is still high. In July the UK had the highest rate of inflation in the G7. The United States is currently experiencing an inflation rate of 2.9% 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 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 9.3% since the pandemic started.

Economic inactivity has fallen in the most recent quarter, with the rate standing at 21.9% for those aged 16 to 64 in May to July 2024 – down from 22.3% in the previous quarter. Overall, the number of those aged 16 to 64 who are economic inactive is 747,000 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 May to July 2024 quarter was 14.2%, 1.2 percentage points higher than the rate in the same quarter one year earlier (13.0%). The number of young people aged between 16 and 24 who are not in employment or full-time education currently stands at 1,173,000.

The percentage of those aged 16 to 17 who were not in employment or full-time education was higher in May to July 2024 compared with the same quarter one year earlier (9.1% and 7.3% respectively). Over the same period the percentage of 18-to-24-year-olds who were not in employment or full-time education rose from 17.9% to 18.5%. 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 June to August 2024 quarter were down by 15,000 on the previous month, at 857,000, and 42,000 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 1.8 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 May to July 2024 quarter was 1,437,000. The quarterly headline figure has fallen by 74,000 since February to April 2024. The ONS figure for claimant unemployed is 1,792,000. Changes to work search requirements from May 2024 onwards have resulted in an increase in the numbers of claimant unemployed and so the steep rise in this series since May is at least partly due to this discontinuity. In July 2024 the number of unemployed people who were claiming unemployment-related benefits was 332,000 higher than the number unemployed on the official measure.

7. Unemployment rates falling for the over 25s, but rising for young people

The 16-to-24-year-old unemployment rate (including students) was 14.2% of the economically active in the May to July 2024 quarter. The rate for those aged 25 to 49 was 2.9%. For those aged 50 and over it is 2.5%. Compared with the previous quarter the unemployment rate has risen by 0.5 percentage points for 16-to-24-year-olds, while it has fallen by 0.4 percentage points for 25-to-49-year-olds and by 0.3 percentage points for those aged 50 or more.

8. Long-term unemployment falling across the age range

Youth long-term unemployment (which can include students) is down by 24,000 over the last quarter and stood at 171,000 in the May to July 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 235,000 in the May to July 2024 quarter. The number of people aged 25 and over out of work for 12 months was 16,000 lower in the most recent quarter than in the previous quarter (February to April 2024).

9. The employment picture varies across the country

Employment rates in the May to July quarter of 2024 were higher than the equivalent quarter in 2023 in Northern Ireland, the South West and London. London saw the largest increase in the employment rate, at 2.8 percentage points, while the employment rate rose by 1.5 percentage points in the South West and 1.2 percentage points in Northern Ireland. In almost all other regions, the employment rate in the most recent quarter was lower than it was one year earlier, with the exception of the North West, where it was unchanged. The fall in the employment rate over this period was greatest in the North East, where it declined by 3.9 percentage points. Wales also experienced a sizeable reduction in the employment rate, with a fall of 2.9 percentage points.

The rate of economic inactivity in the May to July quarter of 2024 was lower in Northern Ireland, the South West and London than it was one year earlier. The reduction in economic inactivity was greatest in London, where it fell by 3.4 percentage points between 2023 and 2024. In the East Midlands the rate of economic inactivity was virtually unchanged over this period and in all other regions the rate of economic inactivity rose compared with one year earlier. The increase in the rate of economic inactivity was most pronounced in the North East, which saw a rise of 3.5 percentage points, and Wales, where the rate of economic inactivity increased by 2.8 percentage points. 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.