Employment rates falls while economic inactivity rises

The latest labour market statistics show unemployment up, employment down and economic inactivity continuing to rise.

Three people sitting at a job interview


Employment rates for this Parliament have fallen for the first time in decades, according to the latest figures from the Office for National Statistics.

The March to May figures show employment down to 74.3% and unemployment up to 4.4%.

Economic inactivity also continues to rise and is now at 22.3% while job vacancies have fallen by 12,000. The sectors worst hit in terms of job vacancies were wholesale and retail trade and repair of motor vehicles and motorcycles, while health, social care and professional, scientific and technical activities were the sectors which had increased vacancies the most. Wages are still rising at an average rate, in real terms, of 2.3%.

The ONS says increases in economic inactivity over the latest quarter were largely because of those aged 50 to 64 years, with looking after family and home, long-term sickness or temporary sickness the main causes.

Tony Wilson, Director at the Institute for Employment Studies said: “The last Parliament has been truly dismal for employment, and today’s figures are the worst that we have seen since the pandemic. For the first time since Thatcher’s first term, the number of people in work has fallen, down by around 40,000 since Boris Johnson’s victory. By comparison, employment grew by nearly four million between 2010 and 2019, and by nearly three million across Labour’s three terms (which included the great financial crisis). This Parliament has also seen the largest rise in economic inactivity and largest contraction in the size of the workforce since comparable records began in 1971. And this just isn’t happening in other countries, with the UK virtually the only developed economy where the employment rate has fallen since the Covid-19 pandemic.

“We need to address this urgently, because when employment stops growing the economy stops growing too. Reforming employment support needs to be a top priority for the next Parliament, so that more people can get access to the help that they need to get back into work and get on in work.”


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