ONS COVID-19 Briefing: Labour Market in the UK

Briefing: 16th July 2020 Labour market overview, UK: July 2020

National (Released 16th July 2020)

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

Key Points:

  • Early estimates for June 2020 from PAYE RTI indicate that the number of payroll employees fell by 2.2% (649,000) compared with March 2020. (Flows analysis suggests that the falls in May and June are mainly because of fewer people moving into payrolled employment).
  • Employment is weakening and unemployment is largely unchanged, but there are some signs of economic inactivity rising, with people out of work not currently looking for work.
  • Hours worked has continued to fall reaching record lows both on the year and on the quarter.
  • New analysis shows that there were around half a million people away from work because of the pandemic and receiving no pay.
  • The Claimant Count fell slightly in June 2020 reaching 2.6 million; this includes both those working with low income or hours and those who are not working.
  • Vacancies in the UK in April to June 2020 are at the lowest level since the Vacancy Survey began in April to June 2001, at an estimated 333,000; this is 23% lower than the previous record low in April to June 2009.
  • The three months to May 2020 saw strong falls in pay; total pay fell by 0.3% on the year, this equates to a fall of 1.3% when considering inflation.

Employment

For March to May 2020:

  • The estimated employment rate for all people was 76.4%; this is 0.3 percentage points up on the year but 0.2 percentage points down on the quarter.
  • The estimated employment rate for men was 80.1%; this is 0.1 percentage points down on the year and 0.4 percentage points down on the quarter.
  • The estimated employment rate for women was 72.7%; this is 0.7 percentage points up on the year but largely unchanged on the quarter.

Despite the estimated fall in employment of 126,000 on the quarter, the estimated number of redundancies has not increased significantly over the period.

Unemployment

Estimates for March to May 2020 show an estimated 1.35 million people were unemployed, 55,000 more than a year earlier but 17,000 fewer than the previous quarter.

For March to May 2020:

  • The estimated UK unemployment rate for all people was 3.9%; 0.1 percentage points higher than a year earlier but largely unchanged on the quarter
  • The estimated UK unemployment rate for men was 4.0%; this is 0.1 percentage points higher than a year earlier but 0.2 percentage points down on the quarter
  • The estimated UK unemployment rate for women was 3.8%; this is 0.2 percentage points higher than a year earlier and 0.1 percentage points higher on the quarter
  • the estimated number of people unemployed aged 16 to 24 years increased by 47,000 on the year while other age groups remained steady, despite the lack of overall increase.

Initial investigative analysis suggests that a greater than usual proportion of those leaving employment are not currently looking for a new job and therefore becoming economically inactive rather than unemployed.

Economic inactivity

Estimates for March to May 2020 show 8.46 million people aged between 16 and 64 years not in the labour force (economically inactive), 157,000 fewer than a year earlier.

For March to May 2020:

  • The estimated economic inactivity rate for all people was 20.4%; this is down by 0.4 percentage points on the year but up 0.2 percentage points on the quarter
  • The estimated economic inactivity rate for men was 16.5%; this is up by 0.1 percentage points on the year and up a joint record high of 0.5 percentage points on the quarter
  • The estimated economic inactivity rate for women was 24.3%; this is down by 0.9 percentage points on the year and down by 0.1 percentage points on the quarter

Those who are economically inactive and who want a job increased by a record 257,000 on the year and a record 253,000 on the quarter, while those who do not want a job decreased by a record 414,000 on the year and 161,000 on the quarter. This perhaps further explains why the unemployment rate has not increased.

Hours worked

Between March to May 2019 and March to May 2020, total actual weekly hours worked in the UK decreased by 175.3 million, or 16.7%, to 877.1 million hours.

The “accommodation and food service activities” industrial sector saw the biggest annual fall in average actual weekly hours; down 12.0 hours to a record low of 16.0 hours per week.

Claimant count (experimental statistics)

Those claiming unemployment-related benefits (either UC or JSA) may be wholly unemployed and seeking work or may be employed but with low income and/or low hours, that make them eligible for unemployment-related benefit support.

Between May 2020 and June 2020, the Claimant Count decreased by 28,100 (1.1%) to 2.6 million. Since March 2020, the claimant count has increased by 112.2%, or 1.4 million.

Vacancies

For April to June 2020, there were an estimated 333,000 vacancies in the UK, the lowest level since the Vacancy Survey began in April to June 2001.

This is 497,000 (59.9%) fewer than a year earlier and 463,000 (58.1%) fewer than the three months to March 2020.

Contributing most strongly to the quarterly movement were the “wholesale, retail trade and repair of motor vehicles”, down 92,000 (70.0%) and the “accommodation and food service activities”, down by 78,000 (91.1%), both record quarterly falls.

Earnings growth

The rate of earnings growth has been slowing since April to June 2019, when it stood at 4.0% for total pay and 3.9% for regular pay, the highest nominal pay growth rates since 2008.

For the three months to May 2020, compared with a year earlier:

  • Total nominal pay fell by 0.3%
  • Regular nominal pay increased by 0.7%
  • Total real pay fell by 1.3%
  • Regular real pay fell by 0.2%

Pay is now growing at a slower rate than inflation, at negative 1.3% for total real pay, the lowest rate since April to June 2014. Regular pay growth in real terms is also negative, at negative 0.2%.

The three lowest-paid industries, accommodation and food service activities, the retail trade and repairs industry, and the arts, entertainment and recreation industry saw falls in pay compared with May 2019.

Briefing date: 16 June 2020

Data published: 16 June 2020

Labour market overview, UK: June 2020
Estimates of employment, unemployment, economic inactivity, and other employment-related statistics for the UK.

This is the latest briefing on the Healthy Suffolk website, but the ONS may have published further updates. You can find historical information and any further updates on the Office for National Statistics (ONS) website. 

 

Key Points:

  • Early estimates for May 2020 from Pay As You Earn Real Time Information indicate that the number of payroll employees fell by 2.1% (612,000) compared with March 2020.
  • UK employment rate in the three months to April 2020 was estimated at 76.4%, 0.3 percentage points higher than a year earlier
  • UK unemployment rate for the three months to April 2020 was estimated at 3.9%, 0.1 percentage points higher than a year earlier
  • The total number of weekly hours worked in the three months to April 2020 was 959.9 million, down a record 94.2 million (8.9%) hours on the previous year
  • The three months to April 2020 saw total pay fall in real terms for the first time since January 2018
  • Estimated 476,000 vacancies in the UK in March to May 2020; this is 342,000 fewer than the previous quarter and 365,000 fewer than a year earlier
  • The Claimant Count continued to rise during May 2020 reaching 2.8 million; this includes both those employed with low income or hours and those who are unemployed

Employment

For February to April 2020:

  • the estimated employment rate for all people was 76.4%; this is 0.3 percentage points up on the year but 0.1 percentage points down on the quarter
  • the estimated employment rate for men was 80.1%; this is 0.2 percentage points down on the year and 0.4 percentage points down on the quarter
  • the estimated employment rate for women was 72.7%; this is 0.7 percentage points up on the year and 0.2 percentage points up on the quarter
  • record quarterly fall in the number of self-employed – down 131,000
  • the number of those temporarily away from a job has increased significantly since lockdown

Hours worked

  • Between February to April 2019 and February to April 2020, total actual weekly hours worked in the UK decreased by 94.2 million, or 8.9%, to 959.9 million hours.
  • A decrease of 91.2 million or 8.7% was also seen on the quarter. The “accommodation and food service activities” industrial sector saw the biggest fall in average actual hours; down 6.9 hours to 21.2 hours per week.

Unemployment

Estimated unemployment rates for both men and women aged 16 years and over have generally been falling since late 2013 but have levelled off in recent periods.

For February to April 2020:

  • the estimated UK unemployment rate for all people was 3.9%; 0.1 percentage points higher than a year earlier but unchanged on the previous quarter
  • the estimated UK unemployment rate for men was 4.1%; this is 0.1 percentage points higher than a year earlier but unchanged on the previous quarter
  • the estimated UK unemployment rate for women was 3.7%; this is largely unchanged compared with a year earlier and on the quarter

Claimant count (experimental statistics)

Those claiming unemployment-related benefits (either UC or JSA) may be wholly unemployed and seeking work or may be employed but with low income and/or low hours, that make them eligible for unemployment-related benefit support.

  • The Claimant Count increased in May 2020 to 2.8 million. This represents a monthly increase of 23.3% and an increase of 125.9%, or 1.6 million since March 2020.

Economic inactivity

Since comparable records began in 1971, the economic inactivity rate for all people aged between 16 and 64 years has generally been falling (although it increased during recessions).

For people aged between 16 and 64 years, for February to April 2020:

  • the estimated economic inactivity rate for all people was 20.5%; this is down by 0.3 percentage points on the year but up 0.1 percentage points on the quarter
  • the estimated economic inactivity rate for men was 16.4%; this is up by 0.2 percentage points on the year and up 0.4 percentage points on the quarter
  • the estimated economic inactivity rate for women was 24.4%; this is down by 0.8 percentage points on the year and down by 0.2 percentage points on the quarter

Vacancies

  • For March to May 2020, there were an estimated 476,000 vacancies in the UK; this is 342,000 fewer than in the previous quarter (December 2019 to February 2020). This is the largest quarterly fall in the history of the time series.
  • Wholesale, retail trade and repair of motor vehicles” industrial sector down 67,000 (49.9%) and the “accommodation and food service activities” industrial sector down by 64,000 (70.7%), both record quarterly falls. These industries have been impacted heavily by social distancing measures, with hotels, restaurants and retail stores being closed as a result.

Earnings growth

For the three months to April 2020:

  • total pay (nominal) annual growth rate was 1.0%
  • regular pay (nominal) annual growth rate was 1.7%
  • total pay (real) annual growth rate was negative 0.4%
  • regular pay (real) annual growth rate was 0.4%

Between February to April 2019 and February to April 2020, average pay growth varied by industry sector:

  • Public sector saw the highest estimated growth, at 3.2% for regular pay
  • Construction sector saw negative growth, estimated at negative 1.8%
  • Both the wholesaling, retailing, hotels and restaurants sector and the manufacturing sector saw very weak growth at 0.1% for regular pay
  • At industry level, those with the lowest pay levels have seen a fall in pay, in particular accommodation and food service activities