You are here: Home - Household Bills - News -

Rise in unemployment as real-term wage growth continues to fall

Written by:
The rate of employment grew in the first three months of the year, according to the Office for National Statistics (ONS). But so did the figures for unemployment.

It found that the unemployment rate rose by 0.1 percentage points to 3.9 per cent, which the ONS said was largely down to people unemployed for over 12 months.

The ONS data found that the estimated number of vacancies between February and April dropped by 55,000 to a total of 1,083,000. It’s the tenth straight period in which vacancies have dropped, with the ONS noting that respondents pointed to economic pressures as a reason for holding back on recruitment.

The ONS also noted that the estimate of payrolled employees for April 2023 shows a monthly decrease, down to 29.8 million. That’s a fall of 136,000 since March and represents the first fall since February 2021, though the ONS cautioned the figure is only provisional and so likely to be revised.

While the unemployment rate increased, so too did the employment rate. It moved up by 0.2 percentage points to 75.9 per cent between January and March. The ONS said this was driven by an increase in part-time and self-employed workers.

Inflation wiping out wage growth

The data also highlighted the impact that inflation is continuing to have on the real terms changes to our pay.

According to the ONS, growth in total pay (which includes bonuses) was 5.8 per cent between January and March 2023, while regular pay (which excludes bonuses) was up by 6.7 per cent.

However, when adjusted for inflation, total pay actually dropped by three per cent, while regular pay fell by two per cent.

A resilient jobs market

Myron Jobson, senior personal finance analyst at interactive investor, said that a “triple whammy” of credit tightening, rising interest rates and high inflation had contributed to push unemployment higher.

He continued: “The job market has remained remarkably robust and resilient amid ongoing economic uncertainty, but the latest labour market figures suggest that the post pandemic hiring sugar rush is abating. Job openings have fallen in 14 out of 18 industry sectors, suggesting that many employers are reining in their recruitment over concerns of the UK’s economic picture. With borrowing costs on the up and inflation remaining rampant, the job market faces no shortage of headwind.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week