16: Employment Data - Better Than Expected

UK unemployment has fallen to its lowest level in nearly 50 years. The ONS stated the unemployment rate at 3.7% in Q1 2022, which is the lowest level since 1974, with there being fewer people out of work than there are job openings for the first time on record. The ONS also said annual growth in regular weekly earnings rose to 4.2% in Q1 2022.

Unsurprisingly, this overall earnings growth masked big disparities between public and private sector wages. Nominal total pay rose 10.7% year on year in finance and business services, but just 1.4% in the public sector. The way we work is changing too, the number of part-time and self-employed in the workforce has risen, whilst the number of full-time employees has fallen. 

No question, the labour market is in far better shape now than ministers or economists could have ever expected... However, unemployment is predicted to rise as a combination of falling living standards, higher taxes and rising interest rates continue to push the economy into recession.

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