interactive investor comments on the ONS Labour Market overview.
- Growth in average total pay (including bonuses) was 5.4%, and growth in regular pay (excluding bonuses) was 4.0% among employees in December 2021 to February 2022
- In real terms (adjusted for inflation) in December 2021 to February 2022, growth in total pay was 0.4% and regular pay fell on the year at negative 1.0%.
- The unemployment rate for December 2021 to February 2022 decreased by 0.2 percentage points on the quarter to 3.8%
- Employment rate was largely unchanged on the quarter at 75.5%, but still below pre-coronavirus (Covid-19) pandemic levels.
- The number of job vacancies in January to March 2022 rose to a new record of 1,288,000. However, the rate of growth in vacancies continued to slow down.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “While it is the best period in years for wage growth, many households will still feel like they’re not making any headway against higher prices for everything from gas and electricity to groceries.
“The harsh reality is inflation has erased gains in wages and then some, on average - which for many means that while their pay packet has gone up, they can buy less stuff with it.
“With the Bank of England predicting that inflation could hit double digits this year, workers could be trapped in a cycle of bumper wages only to see those gains nullified by rising prices.
“Those fortunate enough to have received a bonus might now have just enough to withstand the inflationary storm, but strong bonus payments continue to mask the reality that once you take inflation into account, pay has fallen faster than any time in almost eight years – with the exception of the coronavirus pandemic period.
“While no one is immune from inflation which reached a 30-year high last month, it takes into account a broad range of goods and services, so it will affect people differently based on what they purchase. Those who use public transport, for example, have been spared the full brunt of the hikes in the cost of petrol and diesel. Staples like rent and groceries are harder to avoid.”
“On some level, these are heady times for the labour market, with the unemployment rate tittering below its pre-pandemic rate and the number of job vacancies hitting a new record high.
“But the number of people out of work and not looking for a job rose again which is a worrying trend which means that total employment remains well below its pre-pandemic level and raises important questions around motivation to work and what can be done to change this. For many, securing a job with meaningful career progression remains desperately out of reach after two years of lost opportunities during Covid.”
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