United Kingdom: Labor market remains strong in early 2023
According to the ONS, in December–February the unemployment rate registered 3.8%, up 0.1 percentage points from the previous rolling quarter but below pre-pandemic levels. Employment rose by 31,000 month on month in March, and job vacancies were above pre-pandemic levels in Q1 despite easing further.
These figures show that the labor market remains in good shape, which should continue to prop up spending in the face of double-digit inflation and declining real wages. Looking ahead, the labor market is set to lose momentum as higher interest rates take some wind out of the economy’s sails, although the rise in the unemployment rate will be limited.