A sharp rise that puts thousands out of work
The ONS labour market release for September 2025 shows unemployment in Wales climbing from 4.9% in August to 5.7%, meaning around 88,000 people are now out of work.
Employment has also slipped. Just over 70% of working‑age adults in Wales are in jobs, compared with a UK average of 75%. The Welsh Government’s own overview confirms Wales has the lowest employment rate of any UK nation.
One in four adults missing from the workforce
The figures also show Wales continues to have the highest economic inactivity rate in Great Britain. Nearly one in four adults of working age — around 482,000 people — are not working and not looking for work.
The ONS bulletin cautioned that while quarterly changes may not be statistically significant, the overall trend shows Wales lagging behind the UK average in both employment and inactivity.
An economy built on public services and shops
The ONS breakdown of jobs by sector shows where the pressure is falling.
Health and social care remains Wales’ biggest employer with more than 430,000 jobs, followed by education with 220,000. Retail still accounts for around 355,000 jobs, but manufacturing has slipped to 195,000 and construction to 158,000.
Hospitality employs about 247,000, a sector that grew after the pandemic but is now vulnerable as households cut back on spending. Transport and storage jobs remain steady at around 124,000, while professional and technical services employ about 221,000 — far fewer than in regions with stronger private‑sector growth.
The figures underline Wales’ reliance on public services and consumer‑facing industries, leaving the economy exposed when budgets tighten or demand falls.
Political blame game meets expert warnings
The figures have sparked a political row.
Samuel Kurtz MS, Welsh Conservative Shadow Cabinet Secretary for Economy and Energy, said: “Unemployment is at crisis levels in Wales after 26 years of anti‑business Labour, propped up by Plaid and compounded by Rachel Reeves’ economic mismanagement. Unemployment levels didn’t even hit these heights during the pandemic.”
He called for tax cuts and business rate reductions to help high streets and encourage growth.
Welsh Liberal Democrat Westminster Spokesperson David Chadwick MP said: “Surely the writing is on the wall now for the Chancellor’s jobs tax.
“Everyone except Rachel Reeves seems to have woken up to the fact that forcing small businesses to pay more in tax for giving people jobs would damage job opportunities. Now the proof is staring her in the face.
“The UK Labour Government must reverse their damaging National Insurance hike at the Budget, and commit to saving the small businesses that employ thousands in Wales and are at risk of collapse, if they’re to have any hope of reversing today’s concerning trend.”
Experts have also warned of wider risks. Yael Selfin, Chief Economist at KPMG UK, told Sky News the rise in unemployment “shows the labour market is loosening faster than expected” and said households would feel the squeeze as job security weakens.
Paul Nowak, General Secretary of the TUC, told the Guardian the government must act to protect jobs and invest in skills, warning that “otherwise communities will be left behind.”
And Ruth Gregory, Deputy Chief UK Economist at Capital Economics, told the Financial Times the figures “reinforce the case for the Bank of England to cut interest rates sooner rather than later.”
What it means for families and communities
For ordinary people, the statistics translate into fewer job opportunities, more competition for vacancies, and greater uncertainty heading into winter. Families may find it harder to budget, while communities could see more pressure on public services and local shops.
Economists warn that unless Wales can attract more private‑sector investment and reduce inactivity, the gap with the rest of the UK will continue to grow.
