PRESS RELEASE : PwC comments on ONS labour market statistics [December 2022]

The press release issued by PWC on 13 December 2022.

Commenting on the latest ONS labour market data, Barret Kupelian, senior economist at PwC UK, says:

“The more noteworthy news from today’s release of labour market data for the UK was that the labour market is showing some signs of cooling.

Despite marginal growth in employment, the number of vacancies in the UK economy continued to decrease for a fifth consecutive month since summer this year. There are now as many vacancies in the UK economy as the number of unemployed. As the economy stagnates in the coming months, we expect the labour market to cool further with vacancies dropping further.

In more positive news, economic inactivity appears to be coming down. A closer look at the data shows that the decrease in economic inactivity was driven by the 50-64 age cohort. This was also the same age cohort which led to the increase in the economic inactivity rate when the pandemic began.

This trend is likely to be driven by a combination of factors including treatment of underlying health conditions, higher nominal pay on offer due to the relatively tight labour market, and potentially negative wealth effects associated with lower asset prices.

Finally, pay differentials continue to remain stark in different sectors of the economy. Average weekly earnings growth in the private sectors was 6.9% in the three months to October compared to 2.7% in the public sector. This difference was amongst the largest seen between the private and public sectors, and could perhaps explain why 417,000 working days were lost because of labour disputes in October 2022.”