Wages in the UK rose less than prices at the end of last year, while job vacancies hit a record high and the unemployment rate hit a pandemic low.
Average weekly earnings, excluding bonuses, rose at an annual rate of 3.7% in the last quarter of 2021, according to data released by the Office for National Statistics on Tuesday. However, prices rose faster than wages, meaning wages fell by 0.8% in real terms.
This despite a tight labor market. The number of job vacancies in the three months to January hit a record 1,298,400, an increase of 513,700 from its pre-coronavirus level from January to March 2020.
The number of employees based on real-time data from HMRC also rose by 108,000 between December and January to a record 29.5 million.
Sam Beckett, head of economic statistics at the ONS, said the number of employees on payroll increased in January 2022 and was well above pre-pandemic levels. However, he noted that the number of people in jobs overall is lower than before Covid-19 hit. “It’s because there are now a lot fewer self-employed people,” he said.
The unemployment rate fell 0.2 percentage points in the quarter to 4.1%.
The number of people in employment also fell by 38,000 in the three months to December from the previous quarter, the first contraction since the start of last year. This is a smaller contraction than the 65,000 predicted by economists polled by Reuters.
Unemployment and employment both fell because many people left the labor force during the pandemic.