Employment indicators
Jobs and earnings momentum surprisingly strong in December
29 Jan 2024
Our take on the latest Employment indicators (Mon 29 Jan 2024)
Filled jobs up 0.2% in December (seasonally adjusted)
Growth in earnings per filled job rises above 5%pa again
Construction employment picks up to a 16-month high
The key numbers...
- Filled jobs rose 0.2% in December from the month before (seasonally adjusted), driven largely by a 0.4% increase in service industries employment. Filled jobs in good-producing industries rose 0.1%, but primary industry jobs eased 1.8%.
- Employment growth accelerated across most industries in December, with notable rises in health care, construction, and education. Jobs growth in health care picked up to its fastest rate since late-2021, and construction jobs growth reached a 16-month high.
- Professional services jobs numbers continued to fall in December, but the pace of decline eased to 0.6%pa. Retail trade jobs growth remained low at 0.6%pa.
- Jobs growth picked up across all age groups except 15-19-year-olds (where declines steepened to 9.9%pa). Growth across all five-year subgroups between 30 and 49 years old accelerated to its fastest rate since the series began in 2019.
- Annual growth in earnings per filled job picked up from 4.8%pa in November to 5.6%pa, with wage inflation rising slightly across the primary, goods-producing, and service sectors.
Jobs growth picks up in December
Filled jobs, 3-month annual % change
...and our reaction
- Although December’s result represents stronger labour market momentum compared to the previous few months, jobs growth and wage inflation are still considerably below the rates seen in early 2023.
- With just one month of data, December’s strong result could potentially be a blip in the broader slowdown. Renewed growth in the health, education, and construction sectors was unexpected, given that growth had been generally tailing off over the latter half of 2023.
- Earnings growth still hovering around 5%pa indicates that the labour market is still tight, although fewer job ads and greater ease for businesses in finding staff point to a general softening in wage inflation during 2024.
- Jobs growth could remain lumpy over the next few months – annual net migration grew at a record pace over 2023, and is still flowing through to stronger job numbers. However, we anticipate that net migration has reached a peak and will come down over 2024 as demand for labour eases, with these trends to be reflected by less momentum in jobs growth.
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