Inactivity due to long-term illness has reached a new record.
In January and March, both the employment rate as well as vacancies decreased very little. Unemployment and inactivity also decreased.
The estimated number of employees in April dropped from 29,8 millions to 136,000. It is the first decline since February 2021.
People moving to work has led to a surge in the number of people who have left their state of inactivity.
Real total compensation (including bonuses), and real regular compensation (excluding bonuses), fell by 3% after CPIH inflation.
Prior to inflation, the total compensation (including bonuses and regular wages) increased by 5.8%.
The private sector grew by 7%, while the public sector grew at 5.6%. The public sector’s growth has not been so rapid in 20 years.
The ONS released data on employment and wages for the period January to March.
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Falling Unemployment and Inactivity
The number of people who can work is increasing at an unprecedented rate. Those who have been sick for a long time are not as fortunate. People with conditions that have been exacerbated due to lockdowns or gaps in the system of care throughout the pandemic do not receive the treatment they require.
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BMA estimates that in March, there were 7.3 million patients waiting to receive NHS treatment. They estimate it would take an entire year to eliminate the backlog. The number of people who have been unable to work due to long-term illness has reached a new record.
The more recent employment statistics also showed worrying signs, as they fell for the very first time since the year 2021. ONS wants to stress that this early estimate could change later. However, there is a chance it is a canary for an employment situation which is weakening.
Employers said that they held back due to concerns over the future economy. The employment market is still relatively tight, but we’re still experiencing historically high levels. It will still be a situation to keep an eye on.
There are some positives as well, such as a decline in unemployment and redundancies, which have remained below the pre-pandemic level, along with an increase in wages. While there are some warnings, it’s still too early to raise alarm.
Increase in Wages
There has been some relief in the form of relatively fast wage increases, especially for public sector workers who haven’t seen their wages increase so rapidly for over 20 years. It’s possible that they could continue in this way unless both parties are willing to stay locked in a cycle of strike and stalemate.
The pressures on our finances have not eased, as wage increases are far behind the inflation. Each month, we find it more difficult to meet the monthly bills.
We’ve also seen a drop in petrol prices, as well as a reduction of some supermarket staples, such at milk and pasta. And we expect energy bills to fall by July.
These are bright spots in a dark outlook on our budgets for the next few weeks. It’s likely to be a while before we see more price reductions.”
Figures from the Release
It was down by 0.1 points to 3.9% but up 0.1 from the time before pandemic. This increase was mainly due to people who had been unemployed longer than one year.
It was up by 0.2 points compared to the month before, but still 0.7 percent below levels pre-pandemic.
The inactivity rate has dropped by 0.4 points, to 21%. However, it is still higher than before the outbreak of the pandemic.
Redundancy rates fell from 2.8 to 0.7 employees per 1,000. It is below the pre-pandemic level.
The number of vacancies fell by 55,000 to 1.08 million in the third quarter. This is the 10th successive period where the numbers have fallen. Employers say that they are holding off on hiring because of the economic climate.
Sarah Coles is the head of Personal Finance at Hargreaves Lansdown