The UK unemployment rate (for those aged 16 years and over) was largely unchanged on the quarter at 4.2%, according to alternative estimates for September to November 2023, published by the Office for National Statistics.

At the same time, the UK employment rate (for those aged 16 to 64 years) increased by 0.1% on the quarter to 75.8%.

Meanwhile, the UK economic inactivity rate (for those aged 16 to 64 years) decreased by 0.1 percentage points on the quarter to 20.8%.

Annual growth in regular earnings (excluding bonuses) in the UK was 6.6% in September to November 2023, down from 7.2% in the quarter ended October 2023 and annual growth in employees' average total earnings (including bonuses) was 6.5% in September to November 2023. This was also down from 7.2% from October 2023.

Annual growth in real terms (adjusted for inflation using the Consumer Prices Index including owner occupiers' housing costs (CPIH)) for total pay rose on the year by 1.3% in September to November 2023, and for regular pay rose on the year by 1.4%.

Annual average regular earnings growth for the public sector was 6.6% in September to November 2023, remaining strong but not as high as in recent periods; for the private sector this was 6.5%, with growth last lower than this in June to August 2022 (6.2%).

The wholesaling, retailing hotels and restaurants sector saw the largest annual regular growth rate at 7.2%, followed by the finance and business services and sector and manufacturing sector both at 7.0%.

The estimate of payrolled employees in the UK for December 2023 decreased by 24,000 on the revised November 2023 figure to 30.2 million. The December 2023 estimate should be treated as a provisional estimate and is likely to be revised when more data are received next month.

In November 2023, there were 69,000 working days lost because of labour disputes across the UK, the lowest number of working days lost since May 2022. Over half of the labour disputes in November 2023 were in the transport, storage, information and communication industries.

In October to December 2023, the estimated number of vacancies in the UK fell by 49,000 on the quarter to 934,000. Vacancies fell on the quarter for the 18th consecutive period, the longest consecutive run of quarterly falls ever recorded but still above pre-coronavirus (Covid-19) pandemic levels.

Because of the increased uncertainty around the Labour Force Survey (LFS) estimates, the ONS published an alternative series of estimates of UK employment, unemployment, and economic inactivity.

ONS director of economic statistics Liz McKeown said, “The overall picture continues to be broadly stable, with the unemployment rate unchanged and the employment rate up slightly on the previous three months.

“Job vacancies fell again, with the retail area seeing the biggest fall. However, the overall number of vacancies still remains above its pre-pandemic level,” McKeown said. “November saw the lowest number of days lost to strikes for 18 months, driven by a big drop in the health sector.”

“While annual pay growth remains high in cash terms, we continue to see signs that wage pressures might be easing overall. However, with inflation still falling more quickly, earnings continued to grow in real terms,” McKeown added.

Neil Carberry, Recruitment and Employment Confederation, chief executive, said, “The labour market has slowed over the past few months, but activity levels remain resilient. Vacancies are higher than pre-pandemic and unemployment, while rising, is still at a low level by historic standards. The jobs market does now seem to be in a bit of a stand-off with the wider economy, with both employers and candidates waiting to see how the economy develops before committing to new roles.”

Carberry continued, “This situation means there is a premium on getting growth going by injecting confidence into businesses and workers. With pay clearly moderating, and other surveys pointing to this continuing in the spring, and inflation falling, reducing interest rates would offer many hard-pressed businesses and workers a sign of progress.”

Tania Bowers, global public policy director at the Association of Professional Staffing Companies (APSCo), said, “While the latest data is showing a decline in vacancies, there are a number of factors which need to be considered when analysing the state of the UK’s labour market. First and foremost, the number of jobs noted by the end of last year is still higher than the levels recorded between 2005 and 2020, meaning that things remain relatively stable for now.”

“Secondly, there are still prevailing questions around the statistics which means this information shouldn’t be used as a standalone indicator of the jobs market,” Bowers added. “While vacancies have fallen 5% in the periods between July to September and October to December, the alternative estimates are suggesting that the employment rate for those aged 16 to 64 has increased marginally. This lack of correlation between falling vacancies and increasing employment levels means there’s likely more at play that the data isn’t showing.”

“With the ONS using experimental data whilst also reinforcing the data pool of the main survey, we will likely need to see a few quarters of the revised statistics to be able to fully interpret what the data means for the UK,” Bowers said.