Fewer unemployed people than job vacancies in latest labour force data

The latest Labour Force Survey (LFS) estimates from the Office for National Statistics (ONS) for January to March 2022 show that over the quarter there was a decrease in the unemployment rate, while the employment and inactivity rates increased.

The UK employment rate increased by 0.1 percentage points on the quarter to 75.7 per cent but is still below precoronavirus pandemic levels.

The increase in the employment rate was driven by the movement of people aged 16 to 64 years from unemployment to employment.

However, there was also a recordhigh movement of people from economic inactivity into employment.

Total job-to-job moves also increased to a record high of 994,000, driven by resignations rather than dismissals, during the January to March 2022 period.

The most timely estimate of payrolled employees for April 2022 shows a monthly increase, up 121,000 on the revised March 2022, to a record 29.5million.

Total actual weekly hours worked increased by 14.8 million hours to 1.04 billion hours in January to March 2022, compared with the previous quarter.

However, this is still 10.7million below pre-coronavirus pandemic levels.

Average actually weekly hours worked are similar to averages before the coronavirus pandemic, with the average hours worked by part-time workers at a record high (16.8 hours per week).

Consequently, the shortfall in total hours is down to the reduced numbers in employment.

The unemployment rate for January to March 2022 decreased by 0.3 percentage points on the quarter to 3.7 per cent.

For the first time since records began, there are fewer unemployed people than job vacancies.

The economic inactivity rate increased by 0.1 percentage points to 21.4 per cent in January to March 2022. Recent increases in economic inactivity have been driven by those aged 50 to 64 years.

The number of job vacancies in February to April 2022 rose to a new record of 1,295,000.

However, the rate of growth in vacancies continued to slow down.

Growth in employees’ average total pay (including bonuses) was 7.0 per cent and growth in regular pay (excluding bonuses) was 4.2 per cent in January to March 2022.

In real terms (adjusted for inflation), growth in total pay was 1.4 per cent and regular pay fell on the year at negative 1.2 per cent; strong bonus payments have kept recent real total pay growth positive.

Previous months' strong growth rates were affected upwards by base and compositional effects.

These initial temporary factors have worked their way out.

However, the ONS is now comparing the latest period with a period where certain sectors had increasing numbers of employees on furlough because of the winter 2020 to 2021 lockdown.

Therefore, a small amount of base effect will be present for these sectors. This will not be to the degree we saw when comparing periods at the start of the coronavirus pandemic.