Ryan FowlerThe Resolution Foundation has highlighted a continued cooling of the UK’s jobs market amid a broader economic slowdown, yet notes that pay growth is holding up well. According to the Foundation’s analysis of the latest HMRC administrative data, the employment rate for those aged 16 and over has dipped to 61.1% from 61.7% at the start of 2023. The number of employee jobs also decreased by 47,000 from May to November 2024.
Despite the cooling market, hiring remains active with firms adding approximately 600,000 jobs per month, although this is slightly below the pre-pandemic average of 650,000. The Resolution Foundation points out that while redundancies are at normal levels, the hiring rate isn’t sufficient to match the pace of workforce growth.
On the wage front, the report shows resilience with private sector wages increasing by 5.4 per cent in cash terms in the three months leading to October, and public sector wages by 4.3 per cent. This has resulted in an overall real-term growth in average weekly earnings of 2.2 per cent over the same period.
However, the Foundation critiques the quality of the latest Office for National Statistics (ONS) data, suggesting that it underestimates the actual employment level by at least half a million, leading to an over-estimation of unemployment and/or economic inactivity.
Hannah Slaughter, senior economist at the Resolution Foundation, commented, “Britain’s jobs market is continuing to cool amidst a wider economic slowdown. The number of people in work is starting to fall, and business confidence is weak.
“But there are also signs of resilience. Firms are still hiring at a respectable rate and pay packets are still growing. The big living standards question for 2025 will be whether hiring and wage growth can continue to boost household incomes, or if they’ll tail off with the rest of the economy.”
