By Xavier Fontdegloria
The U.K.’s jobless rate held at low levels in the last three months of 2022 while pay growth accelerated further, signaling that the labor market remained tight at year-end despite weakening economic growth.
The U.K. unemployment rate stood at 3.7% in the fourth quarter, unchanged from the rate recorded in the three months through November, according to data from the Office for National Statistics released Tuesday.
The reading is in line with economists’ expectations in a poll by The Wall Street Journal.
U.K.’s unemployment rate remains close to the 3.5% seen in the three months to August, which marked the lowest level since 1974.
Despite the stabilization of the employment rate, there were some signs pointing to a cooler labor demand. Job vacancies continued their downward trend at the end of the year, the data showed. Vacancies fell by 76,000 in the three months to January compared with the quarter to October, although they stood at 1.134 million, a high number according to historical standards.
Still, the most recent estimate of payrolled employees rose by 102,000 people in January, up from a 47,000 increase in December. Adjusted jobless claimants fell by 12,900 on month.
Average weekly earnings excluding bonuses increased 6.7% on year in the fourth quarter, accelerating from the 6.5% in the preceding three-month period.
Tightness in the U.K.’s job market partly reflects a decline in labor supply as many people left the workforce during the coronavirus pandemic. In 2022’s fourth quarter, the inactivity rate decreased 0.3% compared with the third quarter, but remained 1.2 percentage points above prepandemic levels.
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