UK unemployment fell to its lowest rate for nearly half a century in the first quarter of 2022, as the number of job vacancies rose to a new high of 1.3 million, according to official data released this week.
The Office for National Statistics said the jobless rate stood at 3.7 per cent in the three months to March, the lowest level since 1974, with fewer people out of work than there were job openings for the first time on record.
The employment rate increased by 0.1 percentage points in the quarter to 75.7 per cent, while the economic inactivity rate also increased by 0.1 percentage points to 21.4 per cent.
Both average total pay (including bonuses) and regular pay (excluding bonuses) increased in the first quarter of 2022, by 7 per cent and 4.2 per cent respectively, said the ONS.
Responding to the figures, Employment minister Mims Davies said:
“Our domestic labour market is recovering well with payroll numbers growing once again and vacancies remaining strong.
“It’s also fantastic to see over one million more disabled people are in work than this time five years ago.
“We do however, fully recognise the impact global inflationary pressures are having on the cost of living for families which is why we’re taking action to help the lowest earners. Our Work Coaches are helping people daily in our Jobcentres to move into work – those going into full time employment could be £6000 better off than on benefits.
“That’s why we’ve launched the Way to Work campaign to get half a million more people to progress into work with over 280,000 moving into a job during the first three months of the campaign.”
Chancellor Rishi Sunak added:
“The unprecedented support we provided through our Plan for Jobs has led to the jobs market remaining robust despite global challenges, with the unemployment rate near record-lows and the number of payrolled employees at a record high.
“I understand that these are anxious times for people, but it’s reassuring that fewer people are out of work than was previously feared, and we are helping them to keep more of their hard-earned money through tax cuts, changes to Universal Credit and support with household bills worth £22 billion this financial year.”
However, the labour market showed a “mixed picture,” said Darren Morgan, ONS’ director of economic statistics.
Mr Morgan said soaring inflation, which hit 7 per cent in March, has almost cancelled out the wage rises, according to ONS figures and Britain’s cost of living squeeze looks set to continue to intensify, with inflation expected to rise further in the coming months.
The Bank of England has projected that inflation will rise further to 9 per cent in the second quarter, due to the energy price cap rise in April, and then peak at slightly over 10 per cent in the last quarter.
Mr Morgan said:
“While the economy was still growing in the first three months of 2022, there continued to be a mixed picture for the labour market.
“Total employment, while up on the quarter, remains below its pre-pandemic level.
“Since the start of the pandemic, around half a million more people have completely disengaged from the labour market.
“However, job vacancies are still rising, reaching yet another record high.
“Indeed, with the latest fall in unemployment, to its lowest rate since 1974, there were actually fewer unemployed people than job vacancies for the first time since records began.
“Continued strong bonuses in some sectors such as construction and especially finance mean that total pay is continuing to grow faster than prices on average, but underlying regular earnings are now falling sharply in real terms.”
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