Unemployment has dropped - but there are less vacancies for job hunters than ever. And wage growth has stalled.

@maxmosley.bsky.social breaks down today's labour market stats.

With the UK economy entering a new economic shock, we are entering a period of heightened uncertainty.

That's reflected in wage growth data, which grew by a modest 0.2% when adjusted for inflation

We can break this down by region, showing the imbalance is sharpest in the north-east where there are five unemployed people per vacancy, and the most balanced in the south-east

Putting this together with todays fall in unemployment means the number of jobs per person seeking work has improved slightly

There have been increasingly too few vacancies per unemployed person, but the fall in unemployment holds that back, for now...

Since the start of 2024, the sharpest fall in vacancies has been in health, largely because there were unusually high numbers of open roles after the pandemic that are now unwinding

But overall, hiring is weakening

Hiring in the UK has fallen to its lowest levels in 10 years, outside of the pandemic

🚨 The last set of labour market figures before the Iran War show we entered this crisis on a stronger footing, with lower unemployment than expected

But under the hood, a cooling jobs market risks dragging on growth just as the economy faces a fresh external shock

Increasingly impressed by Mark Carney.

Inflation up again, from 3.2% in Nov to 3.4% in Dec, just as it seemed we might be on a downward trajectory. Mostly driven by alcohol & tobacco + air fares, so arguably not the bare essentials. But food prices are still climbing.

Interestingly, of those inactive, there's a key trend of more people wanting a job than not.

This suggests to me that people are experiencing more barriers to work, rather than a lack of desire to find a job

The post pandemic driver of inactivity continues to be ill-health, but increasingly fewer people record being inactive due to looking after family

Inactivity has fallen slightly by 0.2 percentage points to 20.8%

This seems to be driven mostly by a fall in inactive over 65s, as more (re)enter the workforce

But the big story of today is that unemployment has already outstripped the latest OBR forecast

While it's held steady at 5.1%, we're already beyond the predicted peak, which is a worrying sign

One more worrying trend for economic growth is that average hours worked continues to languish behind pre-pandemic levels.

It looks small but it matters if people are working fewer hours. This is excepted to worsen over the next few years

Real wage growth continued to slow to 0.9% annual growth

Comparing this to the OBR forecast shows we're on track to reach sustained growth in living standards over the next few years, but the difficult start to last year has held us back a little

The good news is the steady fall in available vacancies (contributing to the loosening conditions above) appears to be levelling off

Looking across the sectors, the greatest competition is in financial services, and the least in health and social care

We're heading towards a too loose labour market.

This matters as a loose labour market will mean a) workers are finding it difficult to find work, and b) act as a drag on future wage growth as workers lose bargaining power

🚨Today’s Labour Market stats are out

Here's a short thread on the key trends 👇

When we cut 30 affordable homes to protect a distant view, we’re not preserving heritage, we’re preserving a housing crisis 👇

A couple of weeks ago I had the privilege of joining the first UK delegation of Emerging Leaders to the European Union in Brussels.

Apparently I’m a ‘future leader’ now, which is although flattering, is possibly a sign that Brexit did more damage than we thought…

Liz Truss is long gone – but her fiscal meltdown still dictates every step Labour makes | Max Mosley A jittery No 10 now seeks the market’s approval for everything. The result? Cruel cuts and a fear of desperately needed public spending, says economist Max Mosley

The latest fiasco over cuts to benefits reveals the deeply ingrained influence of the Truss premiership on this government. They're paralysed by fear of the markets at a time when we need courage.

@maxmosley.bsky.social writes for @theguardian.com
www.theguardian.com/commentisfre...

Liz Truss is long gone – but her fiscal meltdown still dictates every step Labour makes | Max Mosley A jittery No 10 now seeks the market’s approval for everything. The result? Cruel cuts and a fear of desperately needed public spending, says economist Max Mosley

A marvellous and absolutely spot-on piece from @maxmosley.bsky.social @neweconomics.bsky.social

If Starmer and Reeves don't change tack soon, they and the UK, will be in even deeper sh*t

www.theguardian.com/commentisfre...

Liz Truss is long gone – but her fiscal meltdown still dictates every step Labour makes | Max Mosley A jittery No 10 now seeks the market’s approval for everything. The result? Cruel cuts and a fear of desperately needed public spending, says economist Max Mosley

"the financial returns from well-targeted public spending are often far higher than our anaemic assumptions allow... A politics that always talks down the impact of spending ends up justifying stagnation" @neweconomics.bsky.social's @maxmosley.bsky.social www.theguardian.com/commentisfre...

Liz Truss is long gone – but her fiscal meltdown still dictates every step Labour makes | Max Mosley A jittery No 10 now seeks the market’s approval for everything. The result? Cruel cuts and a fear of desperately needed public spending, says economist Max Mosley

Really grateful to have my first opinion piece published in the guardian:

“Fiscal rules weren’t created by Truss, but their new totemic status in British politics was forged in the fire she left behind”

www.theguardian.com/commentisfre...

"Today is a sad indictment of how we make policy in this country. Quote from Max Mosley, senior economist: We've ended up with a rushed and poorly designed set of reforms to disability benefits as a scramble to find government savings after GDP growth was lower than expected following the autumn budget. Something has gone seriously wrong here. How have we ended up in a world where 1 percentage point error in our GDP forecasts cascades down into pushing a quarter of a million people into poverty?"

Today is sad indictment of how we make policy in this country.

Our view on the disability benefits cut vote.

How did benefit cuts land Keir Starmer in such a dreadful mess? Keir Starmer could be about to face his first defeat in parliament. But how did has disability benefits reform landed him in such a mess?

“I think some MPs will rightly just be looking at this and saying, I don’t want to be a politician who is responsible for pushing anybody into poverty, let alone more than 150,000.”

@maxmosley.bsky.social on today's vote on disability benefit cuts in @bigissue.com www.bigissue.com/news/politic...

I can't think of a time in history where we could influence the lives of so many, overnight and at such a low cost.

I spoke to LBC about why we should see removing the 2 child benefit cap as a wonderful opportunity 👇

"New Labour took 14 years and billions of pounds worth of policies to lift half a million children out of poverty.

Keir Starmer could do the same overnight with one policy costing just a fraction of that."

NEF's @maxmosley.bsky.social on @lbc.co.uk calling for removal of the two-child benefit cap.

What’s behind the rise in disability benefit claims? Rising rates of disability colliding with greater financial hardship are pushing more people to seek support

A stark example of this is the government's plan to cut PIP, claiming we "can't afford" the rapid rise in claims. But @maxmosley.bsky.social's analysis shows this rise has been fuelled by growing financial insecurity, which will be further exacerbated by cuts /9 neweconomics.org/2025/05/what...