Wales has seen a fall in unemployment bucking a rise for the 海角视频 as whole which has seen the level climb to the highest rate for four years, but with persistently high economic inactivity continuing to be a major drag on the Welsh economy.
There are concerns that the impact of increased employer national insurance contributions from April will see the unemployment rate for the 海角视频 as a whole continuing to rise in the months ahead. It comes as the number of payrolled workers in the 海角视频 dropped by more than 100,000 in May on April.
According to the ONS in Wales the unemployment rate from February to April was down on November to January by 0.7% to 4.7% (a reduction of 9,000 to 73,000 people). While down on the quarter the unemployment rate in Wales on a year earlier is up 1.2% (22,000).
For the 海角视频 it was up 0.2% to 4.6% on the quarter.
While the employment rate amongst 16-64-year-olds in Wales was 2.3% up on the previous year and 3.2% on the year, it remains below the 海角视频 average of 75.1% at 72.2%. In England the employment rate is 75.1%, Scotland 75% and Northern Ireland 71.7%.
The rate of working age adults in Wales classified as being economically inactive is 470,000 (24.4%). For the 海角视频 as a whole the economic inactive rate is 21.3% with 9.18 million people. Of the nations and regions of the 海角视频 it is only higher in the north east of England (28.1%) and Northern Ireland (26.9%).
Other data from the ONS for May show that the number payrolled employees in the 海角视频 fall 0.9% on a year earlier to 30.2 million, the equivalent of 274,00 employees. While pr
ovisional figures the number was down 109,000 on April. The number of paid employees in Wales fall more than 5,000 on April.
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Welsh Liberal Democrat Westminster spokesperson David Chadwick MP :“These latest figures show the huge amount of damage Labour’s misguided jobs tax is already having on the Welsh economy, with businesses in Wales implementing hiring freezes or cutting jobs.
“The Chancellor talks about growth, but her Budget measures are acting as an anchor against just that. This is especially true in Wales, where our economy is more dependent on small businesses than in Scotland or England.
“25 years of Labour rule in Wales has left our economy stagnant and the private sector employment in a much weaker state than other parts of the 海角视频.
“Rachel Reeves needs to listen, look at the evidence unfolding and scrap her jobs tax to get the Welsh economy growing again.”
Welsh Conservative Shadow Cabinet Secretary for Economy and Energy, Samuel Kurtz MS said:“Under Labour, our economy is broken, both here in Wales and across the United Kingdom. They are demonstrating that you cannot tax your way to prosperity.
“The 海角视频 and Welsh Labour governments, operating from both ends of the M4, have worked hand in glove to make life harder for employers and employees alike. From increasing regulatory burdens to the jobs tax and the family farm tax, their policies have stifled growth and enterprise.
“Welsh Conservatives believe in a Wales that is open for business. We would remove the regulatory stranglehold on our economy by overhauling the current business rates system, abolishing rates for small businesses to revitalise our town centres, and axing the damaging Tourism Tax once and for all.”
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For the 海角视频 as a whole unemployment is the highest level since the three months to July 2021, although the ONS continues caution over the reliability of the statistic as overhauls its Labour Force Survey.
The figures also showed vacancies tumbled by 63,000 to 736,000 in the three months to May - the lowest since April 2021.
Liz McKeown, ONS director of economic statistics, said: “There continues to be weakening in the labour market, with the number of people on payroll falling notably.
Feedback from our vacancies survey suggests some firms may be holding back from recruiting new workers or replacing people when they move on.”
There are fears that the “Awful April” rise in staff costs for firms will send unemployment levels soaring, with some firms already moving to cut jobs ahead of the tax increase.
Oaige Tao, economist at PwC 海角视频, said: “With rising national insurance costs, a higher minimum wage and escalating global tariffs all contributing to heightened cost pressures for employers, today’s figures show that businesses are clearly feeling the squeeze.”
The Institute of Directors raised concerns that “the business case for hiring new staff has been dealt a series of blows” by rising staff costs and upcoming changes to employment law.
Despite the fall in pay growth, economists said earnings so far remained robust - buoyed by the recent minimum wage rise.
The Bank of England will be weighing this up carefully against clear signs of a weakening jobs market, according to economists.
“The labour market looks in worse shape in May, which could tip the Monetary Policy Committee (MPC) into cutting rates again in August,” said Rob Wood at Pantheon Macroeconomics.
Matt Swannell, chief economic adviser to the EY Item Club, said he believed a cut in June remained unlikely, but that rates may come down again in August.
He added: “This data is likely to reinforce the view that underlying inflationary pressures are cooling, but with pay growth still far above the rate consistent with inflation returning sustainably to 2%, most of the MPC will still want to act cautiously to guard against sticky inflation.
Investec economist Philip Shaw said the cooling jobs market would likely “reduce the MPC’s concerns about the threat of ‘inflation persistence”’.