ONS COVID-19 Briefing: Labour Market in the UK

Estimates of employment, unemployment, economic inactivity, and other employment-related statistics for the UK.

Key Points

  • In January 2021, 83,000 more people were in payrolled employment when compared with December 2020; this is the second consecutive monthly increase.
  • In January 2021, 726,000 fewer people were in payrolled employment when compared with February 2020.
  • The UK employment rate, in the three months to December 2020, 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 December 2020, was estimated at 5.1%, 1.3 percentage points higher than a year earlier and 0.4 percentage points higher than the previous quarter.
  • The redundancy rate, in the three months to December 2020, was estimated at 12.3 people per thousand employees.
  • The Claimant Count increased in January 2021, to 2.6 million; this includes both those working with low income or hours, and those who are not working.
  • There were an estimated 599,000 vacancies in the UK in November 2020 to January 2021; this is 211,000 fewer than a year ago and 64,000 more than the previous quarter.
  • Growth in average total pay (including bonuses) among employees for the three months October to December 2020 increased to 4.7%, and growth in regular pay (excluding bonuses) also increased to 4.1%.

Context

Employment

For people aged between 16 and 64 years, for October to December 2020:

  • the estimated employment rate for all people was 75.0%; this is 1.5 percentage points down on the same period the previous year and 0.3 percentage points down compared with the previous quarter (July to September 2020)
  • the estimated employment rate for men was 78.2%; this is 2.4 percentage points down on the same period the previous year and 0.4 percentage points down on the quarter
  • the estimated employment rate for women was 71.8%; this is 0.6 percentage points down on the same period the previous year and 0.1 percentage points down on the quarter

Estimates for October to December 2020 show 32.39 million people aged 16 years and over in employment, 541,000 fewer than a year earlier. This was the largest annual decrease since May to July 2009.

Prior to the COVID-19 pandemic, there were on average 2 to 2.5 million people temporarily away from work. Experimental estimates based on returns for individual weeks show that the number of people temporarily away from work rose to around 7.9 million people in April 2020. The number of people temporarily away from work has fallen since its peak in April and May 2020, although it has increased slightly in November and December.

There were also around 307,000 people away from work because of the pandemic and receiving no pay in December 2020; this has increased slightly since November 2020 but has fallen from around 658,000 in April 2020.

Unemployment

The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed.

For people aged 16 years and over, for October to December 2020:

  • the estimated UK unemployment rate for all people was 5.1%; this is 1.3 percentage points higher than a year earlier and 0.4 percentage points higher than the previous quarter
  • the estimated UK unemployment rate for men was 5.4%; this is 1.4 percentage points higher than a year earlier and 0.2 percentage points higher than the previous quarter
  • the estimated UK unemployment rate for women was 4.8%; this is 1.2 percentage points higher than a year earlier and 0.6 percentage points higher than the previous quarter

The single-month and weekly estimates of the unemployment rate suggest that the rate was largely flat through the October to December 2020 period.

Economic inactivity

For people aged between 16 and 64 years, for October to December 2020:

  • the estimated economic inactivity rate for all people was 20.9%; this is up by 0.4 percentage points on the same period the previous year but largely unchanged on the quarter
  • the estimated economic inactivity rate for men was 17.3%; this is up by 1.2 percentage points on the same period the previous year and up by 0.3 percentage points on the quarter
  • the estimated economic inactivity rate for women was 24.5%; this is down by 0.4 percentage points on the same period the previous year and down by 0.3 percentage points on the quarter

Estimates for October to December 2020 show 8.66 million people aged between 16 and 64 years not in the labour force (economically inactive). This was 187,000 more than a year earlier and 2,000 more than the previous quarter.

Hours worked

Between July to September 2020 and October to December 2020, total actual weekly hours worked in the UK saw an increase of 53.7 million, or 5.8%, to 978.7 million hours.

Average actual weekly hours worked saw an increase of 1.8 hours on the quarter to 30.2 hours.

Redundancies

Reports of redundancy in the three months prior to interview increased in October to December 2020 by 8.4 per thousand on the year to 12.3 per thousand employees.

Claimant count (experimental statistics)

The Claimant Count decreased slightly in January 2021 to 2.6 million. This represents a monthly decrease of 0.8% but an increase of 109.4%, or 1.4 million, since March 2020.

Vacancies

In November 2020 to January 2021, there were an estimated 599,000 vacancies, which is a quarterly increase of 64,000 vacancies.

Earnings growth

In October to December 2020, the rate of annual pay growth was positive 4.7% for total pay and positive 4.1% for regular pay.

The rate of total and regular pay growth had stood at 2.8% and 2.9% respectively in December 2019 to February 2020 immediately prior to any impact from the COVID-19 pandemic was seen; it then slowed sharply in April to June 2020 to negative 1.3% for total pay and negative 0.1% for regular pay before some increase between July and December. The higher percentage growth figure for total pay reflected an increase in bonus payments, because of bonus payments being postponed from earlier in the year.

In real terms, total pay is now growing at a faster rate than inflation, at positive 3.8%, and regular pay growth in real terms is also positive, at 3.3%.