Labour Market Overview, UK: March 2021
23rd March 2021
Todays report from the Office for National Statistics.
The latest three months to February 2021 recorded small increases in the number of payroll employees although since February 2020, the number of payroll employees has fallen by 693,000 with the largest falls seen at the start of the coronavirus (COVID-19) pandemic. Analysis by age band shows that under 25s contributed over 60% of the fall seen since February 2020.
Special analysis of new data using payroll employees and Migrant Worker Scan data shows a small fall in the number of non-UK nationals in employment last year.
Data from our Labour Force Survey (LFS) show the unemployment rate continued to increase, though the increase is smaller than in recent periods, while the employment rate continued to fall. There was an increase for people who are economically inactive, largely driven by people who are inactive because they are students.
Although total hours worked continued to increase from the low levels in the previous quarter, this increase slowed in the latest quarter. The number of people temporarily away from work because of the pandemic and receiving no pay has fallen since its peak in April and May 2020, although it has increased slightly over the last three months.
The number of job vacancies in December 2020 to February 2021 was 26.8% lower than a year ago. This is an improvement on the position in summer 2020 when vacancies were down by nearly 60% year on year, but the rate of improvement has slowed in the past few months. Further restrictions and national lockdowns recently have had an impact on vacancies in some industries more than others, most notably the accommodation and food services industry.
Annual growth in average employee pay continued to strengthen, the growth is driven in part by compositional effects of a fall in the number and proportion of lower-paid employee jobs and by increased bonuses, which had been postponed earlier in the year.
693,000 fewer people were in payrolled employment in February 2021, when compared with February 2020.
68,000 more people were in payrolled employment in February 2021, when compared with January 2021; this is the third consecutive monthly increase.
The UK employment rate, in the three months to January 2021, was estimated at 75.0%, 1.5 percentage points lower than a year earlier and 0.3 percentage points lower than the previous quarter.
The UK unemployment rate, in the three months to January 2021, was estimated at 5.0%, 1.1 percentage points higher than a year earlier and 0.1 percentage points higher than the previous quarter.
The UK economic inactivity rate was estimated at 21.0%, 0.6 percentage points higher than a year earlier and 0.3 percentage points higher than the previous quarter.
The redundancy rate, in the three months to January 2021, was estimated at 11.0 people per thousand employees.
There were an estimated 601,000 vacancies in the UK in December 2020 to February 2021; this is 220,000 fewer than a year ago and the rate of increase in vacancies has slowed strongly in recent months.
Growth in average total pay (including bonuses) among employees for the three months November 2020 to January 2021 increased to 4.8%, and growth in regular pay (excluding bonuses) increased to 4.2%; it is estimated that by removing the compositional effect, the underlying wage growth is around 3% for total pay and around 2.5% for regular pay.
Of the 693,000 decrease in payrolled employees since February 2020, 368,000 can be attributed to employees working in the accommodation and food service activities sector, 123,000 in the wholesale and retail trade sector, while only 1,000 can be attributed to employees working in the construction sector. This decrease is net of an increase of 43,000 employees working in public administration, and 132,000 employees in health and social work.
Looking at the annual decrease by age-band, 437,000 (63.1%) were under 25 years, 174,000 (25.2%) were aged 25 to 34 years and 109,000 (15.7%) were aged 35 to 49 years. Only 5,000 (0.7%) were aged 65 years and over. This decrease is net of an increase of 32,000 aged 50 to 64 years.
Early estimates for February 2021 indicate that median monthly pay increased to £1,930, an increase of 3.9% compared with the same period of the previous year.