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PwC comments on ONS labour market statistics

19/07/22

Jake Finney, economist at PwC UK, says:

“The latest job market data shows that workers are seeing their pay fall in real terms, despite demand for labour remaining at record highs. Real pay excluding bonuses fell by 2.8% year-on-year in May, its sharpest fall since the ONS started recording data on earnings. Consecutive falls mean that, in real terms, regular pay levels are only marginally higher than they were prior to the global financial crisis. The average worker, therefore, has seen little upward movement in their pay for almost fourteen years.

“Despite workers seeing their pay fall in real terms, the rest of the job market data indicates that the UK labour market has continued to perform strongly despite significant economic headwinds. Unemployment fell to 3.8%, while redundancies reached another record low. Economic inactivity levels also declined, suggesting that workers are starting to return to the labour market following absence due to long-term sickness and other reasons. 

“The UK’s heatwave could result in a reduction in hours worked as record high temperatures drain worker productivity levels and make it harder for people to get to their place of work." 

Real average weekly earnings (excluding bonuses), constant 2015 prices

Sources: ONS, PwC analysis

 

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