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Strong Wage Growth Persists - NIESR
Growth in total average weekly earnings rose to 6.0 per cent in the three months to December 2024, and 5.9 per cent if we exclude bonuses.
We forecast total pay growth to moderately slow but remain elevated at 5.2 per cent in the first quarter of 2025.
With inflation falling, annual growth in real regular pay remains strong at 2.5 per cent, meaning workers continue to experience a recovery in their standard of living.
Unemployment slightly rose on the quarter to 4.4 per cent and is forecasted to moderately rise in the coming months.
As vacancies continue to fall, the vacancy-to-unemployment ratio has reached pre-pandemic levels, which is expected to lead to a reduction in wage pressures.
While service sector wages growth notably fell in the third quarter of 2024, it has rebounded to 6.1 per cent in the fourth quarter, showing signs of persistence.
We forecast total pay growth to moderately slow but remain elevated at 5.2 per cent in the first quarter of 2025.
With inflation falling, annual growth in real regular pay remains strong at 2.5 per cent, meaning workers continue to experience a recovery in their standard of living.
Unemployment slightly rose on the quarter to 4.4 per cent and is forecasted to moderately rise in the coming months.
As vacancies continue to fall, the vacancy-to-unemployment ratio has reached pre-pandemic levels, which is expected to lead to a reduction in wage pressures.
While service sector wages growth notably fell in the third quarter of 2024, it has rebounded to 6.1 per cent in the fourth quarter, showing signs of persistence.
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