Today has brought us up to date with the latest UK labour market figures. But before we get to them unfortunately it is necessary to point out that official statistics are heading in the opposite direction to what one might hope. Those who follow the US labo(u)r market figures will know that whilst the headline numbers were strong the other survey based on households suggested a 408,000 fall in jobs, so heading in the opposite direction. In the UK the official labour market survey has collapsed due to not enough people replying. The Office for National Statistics has claimed other countries have the same problem which is both true and untrue. For example I understand in the US the response rate fell from the mid-90%s to the mid-80s. But in the UK I understand that some sections were singing along with UB40.
I am the one in tenA number on a listI am the one in tenEven though I don’t existNobody Knows meEven though I’m always thereA statistic, a reminderOf a world that doesn’t care
Of course the UB40 song was from a time of mass unemployment. But having reported the average earnings figures back in 2021 the reality is that whilst in most of life the IT revolution has led to enormous advances, official statistics are if anything going backwards.
Wages
We can start with some good news for everyone apart from the Bank of England.
Annual growth in regular earnings (excluding bonuses) was 6.0%, the same as for the previous three-month period; and annual growth in employees’ average total earnings (including bonuses) was 5.9%, the same as for the previous three-month period.
In terms of the structure we see that the private and public-sectors are rather similar.
Annual average regular earnings growth for the public sector remains strong at 6.4%; for the private sector, this was 5.8%, with growth last lower than this in April to June 2022 (5.4%).
In terms of the fastest sector we see something rather familiar. I recall Jonathan Portes talking at a Better Statistics conference a couple of years ago and pointing out that finance invariably led the wages figures both in absolute and relative terms.
In February to April 2024, the finance and business services sector saw the largest annual total pay growth at 6.9%. The construction sector saw the smallest annual total pay growth across sectors, at 2.1%.
Switching to the weakest construction wages look to be in a rough patch. Weekly wages fell by £15 in March and whilst there was a rebound in April the last few months seem to be settling around 3% in annual terms.
Real Wages
With inflation declining more quickly than wages we are seeing a more welcome move here.
Using CPI real earnings, total pay was 2.7% in February to April 2024. Growth was last higher in July to September 2021, when it was 3.0%. Regular pay was 2.9%; growth was last higher in June to August 2021, when it was 3.4%.
In terms of a cost of living measure I prefer the Retail Prices Index and even it will be suggesting real wages growth of 2% or so. Unfortunately our official statisticians do not like methods which produce higher inflation readings and thus they have dropped the RPI from many releases.
Looking Ahead
Here both I and the Bank of England can be pleased. This is because wage growth slowed in the single month of April to 5.5% which they will welcome and this continued if we switch to the numbers from tax returns (HMRC).
Early estimates for May 2024 indicate that median monthly pay increased by 5.2% compared with May 2023.
But from my point of view real wages growth will be faster because inflation fell by more than that.
There is a quirk in the detail here. Having noted that the finance sector is so often a leader in the wages pack April was a weaker month with total pay rising at an annual rate of 5.6%. Plus HMRC numbers told us this.
Annual growth in median pay in May 2024 was highest in the accommodation and food service activities sector, with an increase of 9.8%, and lowest in the finance and insurance sector, with an increase of 1.9%.
As to the accomodation sector I rather suspect the numbers here were affected by the changes to the national minimum and living wages. To bring back an old concept there are likely to have been some changes in relativities as a consequence.
Employment
One might reasonably expect some strength here after the wages numbers and indeed the relatively strong economic growth at the start of 2024. But as you can see things get a little awkward.
The quarterly decrease was largely because of full-time employees, but this was partially offset by an increase in part-time employees and full-time self-employed workers. Meanwhile, the annual decrease was largely because of part-time workers.
In fact employment fell by 139,000 in the latest three months and by 359,000 over the past year. This feeds straight into the employment rate.
The UK employment rate for February to April 2024 (74.3%) remains below estimates of a year ago (February to April 2023), and decreased in the latest quarter.
That seems clear cut but like in the US we have another measure telling a different story.
In March 2024, UK workforce jobs increased to 37.2 million, which continues to be at historically high levels. This is a rise of 297,000 (0.8%) since December 2023, with increases in employee jobs and self-employment jobs of 123,000 (0.4%) and 183,000 (4.4%) respectively, alongside a combined decline in government-supported trainees and His Majesty’s forces of 9,000 (4.3%).
This number has been consistently showing rises in employee jobs and more recently self-employment has risen too. Particular growth at the moment is coming from these areas.
The largest increases came from human health and social work activities, up by 97,000 (2.0%), and professional, scientific and technical activities, which was up by 84,000 (2.5%).
Hours Worked
If this was a football match then with the score at 1-1 above we might use Hours Worked to settle a result. Except that they do not help much.
In the latest period (February to April 2024), total actual weekly hours worked decreased on the quarter to 1.05 billion hours and are below the level a year ago (February to April 2023). Men’s hours worked decreased on the quarter, whereas women’s hours worked increased.
Falls of 1.7 million on the quarter and even 9.5 million on the year would be within any margin of error. So they help little.
Comment
We have one sequence of numbers ( wages and workforce jobs) which is consistent with the better economic growth figures. But it is also true that the headline employment numbers do not go with that. Also nor does this.
The UK unemployment rate for February to April 2024 (4.4%) is above estimates of a year ago (February to April 2023), and increased in the latest quarter.
Unemployment rose by 138,000 to 1.51 million in the latest quarter.
Personally I incline towards the workforce jobs numbers and this is better for the economy. But it is worse for the Office for National Statistics which has yet another under performing series to add to its stable of them.
Notayesmanseconomics's Blog 
On the subject of soaring insurance premiums, it appears the write offs of Ev’s can be added to the growing list of things motorists are now subsidising(already including uninsured drivers, shortage of and delays obtaining parts for repairs,crash for cash, car thefts, parts thefts, insurance company losses on gilts), oh and add a little potential cartel like behaviour, totally ignored by the regulator of course.
Question is, if you don’t own an EV, haven’t had an accident for decades, only drive a few thousand a year, why are you paying for all the above????
Hi Kevin
It feels like another soft subsidy as in those owning EVs do not have to pay the full risk price for insurance as others chip in.
I do have some idea of the risk after seeing an ebike on fire the other side of Albert Bridge. It occurred to me that a relatively small battery was being treated rather seriously by the London Fire Brigade with an obvious implication for the bigger ones that will be in EVs.
Hi Shaun, yes Iwonder if insurance companies have been influenced/pressured into offloading the true cost of insuring EV’s on to everyone else by the government in order to prevent premiums for EV’s becoming prohibitive, and making them even less economically viable than they already are!
Regarding EV battery fires, fire brigades do not attempt to put them out as water when it comes into contact with lithium is explosive, releasing vast quantities of heat and hydrogen which further exacerbates the fire.
“EVs are unlikely to reduce carbon emissions or replace conventional cars in the window of climate-change urgency. Passenger cars accounted for only 8% of global CO2 emissions in 2020 (Figure 1). That’s not nothing but it’s an odd place to start saving the planet from climate change considering that 40% of emissions are from electric power generation used to charge EV batteries.
A Volvo study in 2021 revealed that the manufacture and operation of an electric vehicle generates approximately 70% more emissions than its ICE (internal combustion engine) counterpart. The increased emissions are primarily due to the energy-intensive production of batteries and the use of materials like aluminum, which have high production emissions.”?
https://www.artberman.com/blog/the-u-s-will-lose-the-economic-industrial-war-with-china-on-the-renewable-energy-front/
Hi Shaun
Great article as always. Am i right in thinking that unemployment is a lagging indicator?
During the past year I’ve seen lots of jobs being lost. Now these would take a while to work through. Another reason why the election has been called when it has. It will be interesting to see how consumer spending will play out. Lots of jobs being lost, persistent inflation and lack of discretionary spending. I expect the bad weather will be blamed. Hopefully the euro’s will give the economy a push.
The gment can claim that inflation is under control but my car insurance has just come in at +14%. If only my wage inflation was 14%. Come to think of it even 6% would be good 😉
Interesting to see housing taking center stage on the news last night. But as always the policies are there to help housebuilders and not the tax payer. It will be interesting if the craven media call out the ‘help to buy’ and stamp duty polices which are HP inflationary?
Hi Anteos and thank you
Your car insurance point is another argument for the RPI as it records insurance premiums in gross terms as opposed to the net (quite a bit smaller) weighting in the CPI family of measures.
As to your question about unemployment numbers the answer is yes except there have been a couple of changes to the theory.
…& both are lies.
The positive figures are to help the Government’s election prospects, the negative ones to justify ir reductions.
Inflation:
Blue Dragon Thai Green Curry Paste
285 grammes to 170 grammes, an equivalent rise of a whopping SIXTY-EIGHT PERCENT.
That, however, is not all, the spices have been reduced from a three-chilli level to a two-chilli level with soy-bean paste (not present in the original) to give the original consistency. So far cheaper ingredients too.
so roughly a doubling in price.
Lastly, I’d believe Dr Mosley’s death was natural causes had he not left his mobile phone behind; people do that when they do not want to be traced.
Also he should have been found far quicker that he was; it was days before his body was found, in plain sight, on a pathway used every day by holidaymakers.
So if he died of natural causes days earlier he would have been found days earlier.
If he committed suicide, then he must have killed himself days after disappearing, again because he would have been found earlier.
The route only became, “treacherous” after the body was found, spotted by the mayor from a boat. Prior to that, “it was a safe route, traversed by tourists daily.”
Dr Mosley was at the forefront of promoting covid vaccinations, & may have felt remorse after 3m excess deaths.
Hi therrawbuzzin
In terms of the shrinkflation in size the inflation numbers should capture it. But the drop in quality I am much more dubious about. I have checked on quality issues and after a lot of rhetoric about it being covered, the practical elements make me more doubtful.
One thing I forgot to mention, Blue Dragon is marketing it as a new product, so there will be no inflationary effect, will there?
https://www.telegraph.co.uk/money/investing/investors-ignore-increasingly-irrelevant-central-bankers/
Hi Kit
Good to know you are still around and thank you for the link.
Rise in average earnings good for workforce BUT bad for interest rates, forecast of a cut put back again imo.
If this keeps up however pensioners will gain.
Hi Peter
Assuming they have savings yes.
So there’s a clamour for a cut in interest rates to help the economy.
Problems: sure, some folk benefited from furlough, but not in large enough numbers, it seems, to sustain the economy, whilst many must now have spent more than they prudently would just on keeping body & soul together, since Johnson’s war in Ukraine & Johnson’s covid repression. Many more will have spent much more than they can afford, using up every avenue of credit, including the “informal” sector (sharks) to the maximum, out of desperation.
The questions then become, “To have the positive effect the economy requires, how much will we have to cut interest rates, how quickly, & what will be the lag between lowering interest rates & freeing up spending capability?
Is it not the case that even an immediate return to zirp would need many months before money was freed up, even if credit card companies passed on the reductions to customers, WHICH THEY DID NOT DO LAST TIME, EVEN RAISING THEIR RATES?
There are also those who have been trapped into much higher mortgage interest payments, a reduction in optional spending they will not shake off for years.
Is it not best to keep interest rates normal, fighting inflation & giving those who still have savings a return on them, which they can spend?
Since immigrants contribute so much to the economy, I take it we had none in April?