UK unemployment fell to 4. 7% in the three months to August, offering the government a stronger labour-market snapshot before the budget. The rate was down from 4. 9% in the previous period and below the 5% economists had expected.
The improvement was accompanied by weaker hiring demand. Vacancies fell by 21,000, or 2. 9%, to 691,000 in the three months to September. That was the first time the total had fallen below 700,000 since early 2021 and the lowest level outside the pandemic since 2014, when vacancies stood at 686,000.
Vacancies declined in 14 of 18 sectors, with construction recording the largest fall at 7,000. The sharpest reduction by business size was among firms with one to nine employees, which cut 21,000 vacancies. Feedback collected from smaller businesses indicated that higher labour costs were discouraging recruitment.
The figures present a mixed picture for policymakers. Payrolled employment rose by 13,000 between August and September to 30. 3 million, but remained 66,000 below its level a year earlier. The September estimate is provisional and may be revised as more data arrive.
Total pay, including bonuses, grew by 3. 7%, down from 3. 9%, marking its weakest rate since late 2020.
Young people remain particularly exposed to the strain in hiring. Unemployment among 16- to 24-year-olds fell by 28,000 over the quarter to 715,000, but was still 54,000 higher than a year earlier. The data therefore show a labour market with fewer people unemployed at the same time as employers, especially smaller firms, are offering fewer openings.
The latest employment figures add to evidence of resilience, but the decline in vacancies and payrolled jobs over the year points to continuing weakness beneath the headline unemployment improvement.