Over the course of 2023, various indicators suggest a gradual easing in the labor market. Even without considering recent uncertainties surrounding the Labour Force Survey, there has been a consistent decline in job vacancies for the past 16 months, and the growth in payrolled employment has decelerated. Despite these trends, nominal wage growth has demonstrated resilience, surpassing high inflation rates since June. This report delves into the dynamics of wage trends and examines the sustainability of elevated wage growth. Looking forward, projections from both the Office for Budget Responsibility and the Bank of England indicate a continued relaxation of the labor market in 2024. However, there is positive news on the policy front, as the National Living Wage (NLW) is set to increase again in April, reaching the Low Pay Commission’s target of two-thirds of typical hourly pay. Click here for more.
