The unemployment rate remains unchanged, but indications are that the labor market has weakened

The UK jobless rate has remained unchanged for the past three months amid mounting signs that Britain's job market has cooled.

Estimates from the Office for National Statistics (ONS) revealed that the unemployment rate for those aged 16 and over was 4.2% in the quarter to August, the same as in the previous three months.

It comes after official figures last week revealed that real earnings are outpacing inflation for the first time in nearly two years.

But there was also a mixed picture for the broader labor market, after last week's data showed wage growth began to slow for the first time since January, job vacancies fell for the 15th straight time and a drop of 11,000 workers in United Kingdom on the payroll during September.

UK labor market remains tight but cooling, with unemployment rising, vacancies falling and wage growth slowing

Jake Finney, PwC UK

The inactivity rate among 16-64 year olds also remained unchanged at 20.9%, according to the ONS.

The latest “trial” figures were delayed by a week due to a low response to the labor force survey, and the ONS said it used additional sources of data to estimate the figures, including more real-time payroll data.

The ONS said this provides a more “holistic view” of the labor market, while traditional survey statistics are uncertain.

Darren Morgan, director of economic statistics at the ONS, said: “This is part of the transformation of how we measure the labor market, where we are introducing an improved Labor Force Survey, asking more people in different ways about their employment status.”

The figures also showed that 119,000 working days were lost due to labor disputes in August, with the majority of strikes in the health and social work sectors.

Junior doctors and hospital consultants have staged a series of strikes in a long-running dispute over pay and conditions in England's NHS.

Earlier ONS figures showed regular profits rose by a near-record 7.8% in the quarter to August and were 0.7% higher when adjusted for Consumer Price Index (CPI) inflation.

The revised ONS figures also revealed that wages outstripped inflation in the three months to July.

It means wages are rising faster than prices for the first time since October 2021.

But profit growth eased from 7.9% in the quarter to July, in a sign that companies are starting to hold back on wage increases.

Vacancies also fell for the 15th straight time – a quarterly drop of 43,000 to 988,000 in the quarter to September – in a further sign that Britain's job market is cooling in the face of a barrage of rate rises and economic worries.

Jake Feeney, economist at PwC UK, said: “The UK labor market remains tight but cooling, with unemployment rising, vacancies falling and wage growth slowing.”

The latest figures showed there were 1.4 million unemployed in the quarter to August, while the employment rate was also unchanged at 75.7%, with 31.6 million jobs.