UK unemployment rate eases to 3.8%

(Sharecast News) - The UK unemployment rate eased at the end of last year, official data showed on Tuesday, while average earnings continued to rise. According to the latest figures from the Office for National Statistics, the unemployment rate was 3.8% for those aged 16 and over in the three months to December.

That was down on November's rate of 4.2% and below consensus for 4.0%.

The economic inactivity rate was 21.9%, up from 20.9% in November. The ONS said the increase was driven by the number of people who are long-term sick, which remains at "historically" high levels.

The claimant count for January increased by 14,100 on the month, or by 61,200 on the year, to 1.579m. The employment rate was 75.0%.

Vacancies, meanwhile, fell by 26,000 in the quarter, to 932,000. It is the nineteenth consecutive month vacancies have fallen, although they still remain above pre-pandemic levels.

Wage growth, however, beat forecasts. Annual growth in employees' average regular earnings, excluding bonuses, was 6.2%, in contrast to consensus for 6.0%. Including bonuses, wages grew by 5.8%.

Annual growth in real terms, which is adjusted for inflation, for total pay rose by 1.4% and by 1.8% for regular pay.