Employment in the UK: February 2022

Other commentary from the latest labour market data can be found on the following pages:

• Labour market overview

• Average weekly earnings in Great Britain

• Vacancies and jobs in the UK

• Labour market in the regions of the UK

• Public sector employment, UK

• Earnings and employment from Pay As You Earn Real Time Information, UK

• October to December 2021 estimates show a continuing recovery in the labour market compared with the previous three-month period (July to September 2021), with an increase in the employment rate and a decrease in the unemployment rate, however, the economic inactivity rate increased on the quarter.

• Total hours worked increased slightly compared with the previous three-month period but are still below pre-coronavirus (COVID-19) levels, despite the loosening of coronavirus restrictions.

• The UK employment rate was estimated at 75.5%, 0.1 percentage points higher than the previous three-month period, but 1.0 percentage points lower than before the coronavirus pandemic (December 2019 to February 2020).

• The UK unemployment rate was estimated at 4.1%, 0.2 percentage points lower than the previous three-month period, but 0.1 percentage points higher than before the coronavirus pandemic.

• The UK economic inactivity rate was estimated at 21.2%, 0.1 percentage points higher than the previous quarter, and 1.0 percentage point higher than before the coronavirus pandemic.

Latest Labour Force Survey (LFS) estimates are based on interviews that took place from October to December 2021. Many of the government lockdown restrictions had eased prior to this period, and the Coronavirus Job Retention Scheme (CJRS) was withdrawn at the end of September 2021. As such, these estimates are based on interviews that took place following the end of the CJRS.

Because of coronavirus (COVID-19) and the suspension of face-to-face interviewing, we had to make operational changes to the LFS, which moved to a by-telephone approach. This introduced an increased non-response bias to the survey, which was partially mitigated by the introduction of housing tenure-based weights into the survey in October 2020, as detailed in Coronavirus and its impact on the Labour Force Survey.

However, it was acknowledged that further improvement work was required to deal with the increase in non-response from those with a non-UK country of birth or nationality. As a result, a new weighting methodology was introduced in July 2021. Further information is available in Impact of reweighting on Labour Force Survey key indicators, UK: 2020. All estimates in this release are based on the new methodology.

We plan to reweight Labour Force Survey (LFS) and Annual Population Survey (APS) datasets that include data from March 2020. We will provide further details on our plans including a timeline in our March Labour Market publication.

Figure 1: October to December estimates show an increase in the employment and economic inactivity rates compared with the previous three-month period, while the unemployment rate decreased

UK employment, unemployment and economic inactivity rates, seasonally adjusted, between October to December 2006 and October to December 2021

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The increase in the employment rate was driven by the movement of people aged 16 to 64 years from unemployment to employment (Figure 2). Total job-to-job moves also increased to a record high of 988,000, driven by resignations rather than dismissals, during the October to December 2021 period.

Figure 2: There was a net flow of 193,000 from unemployment to employment

UK flows between employment, unemployment, and economic inactivity, people aged 16 to 64 years, (seasonally adjusted) between July to September 2021 and October to December 2021

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During the coronavirus (COVID-19) pandemic, there was a decrease in the employment rate and increases in the economic inactivity and unemployment rates for both men and women (Figure 3).

During the latest three-month period, which followed the end of the Coronavirus Job Retention Scheme (CJRS), there have been increases in the employment rates and decreases in the unemployment rates for both men and women. The increase in the economic inactivity rate compared with the latest three-month period was driven by men, while the inactivity rate for women was largely unchanged.

Young people (those aged 16 to 24 years) have been particularly affected by the coronavirus pandemic, with the employment rate decreasing and the unemployment and economic inactivity rates increasing by more than seen for those aged 25 years and over. During the last three-month period, however, there was an increase in the employment rate and a decrease in the unemployment rate for young people to below pre-coronavirus pandemic rates (Figure 4). The inactivity rate for young people also decreased compared with the previous three-month period.

Following an increase in the employment rate since early 2012, the rate decreased from the start of the coronavirus (COVID-19) pandemic in December 2019 to February 2020. However, there has been an increase since the end of 2020.

The number of part-time employees decreased strongly during the coronavirus pandemic, but has been increasing since April to June 2021 (Figure 5), driving the increase in the employment rate during the latest three-month period. Meanwhile, the number of self-employed workers remains low following decreases through the coronavirus pandemic.

Estimates of flows between employees, the self-employed, and those not in work (either unemployed or economically inactive) show the low level of self-employment is driven by people choosing employee jobs rather than self-employment. In October to December 2021, there was a net flow from self-employment to employees and a net flow from self-employment to not in work (Figure 6). Those who had previously not been in work largely opted for employee jobs, with a flow of 1.07 million from unemployment and economic inactivity to employees. In addition, a record high number remained as employees in October to December 2021.

Figure 6: Employee jobs are being chosen over self-employment

UK stocks (aged 16 years and over) and flows (aged 16 to 64) between employees, self-employed, and not in work, not seasonally adjusted, between July to September 2019 and October to December 2019, and between July to September 2021 and October to December 2021

Notes

1. Those not in work are those who are either unemployed or economically inactive

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Hours worked

Total actual weekly hours worked in the UK have been increasing since the relaxation of coronavirus lockdown measures. Compared with the previous three-month period, total actual weekly hours worked increased by 0.1 million hours to 1.03 billion hours in October to December 2021 (Figure 7). However, this is still 25.5 million below pre-coronavirus pandemic levels (December 2019 to February 2020).

The unemployment rate had generally been falling since late 2013 up until the start of the coronavirus (COVID-19) pandemic in December 2019 to February 2020. It has increased since then but has fallen since the end of 2020.

The decrease in unemployment over the latest three-month period was driven by those unemployed for over 6 months. Those unemployed for between 6 and 12 months have returned to pre-coronavirus pandemic levels, while those unemployed for over 12 months saw the third consecutive decrease over a three-month period since May to July 2020 (Figure 8). Meanwhile, those unemployed for up to 6 months increased slightly from the previous three-month period but remain below pre-coronavirus pandemic levels.

Since comparable records began in 1971, the economic inactivity rate has generally been falling; however, it increased during the coronavirus (COVID-19) pandemic.

The increase in economic inactivity since the start of the coronavirus (COVID-19) pandemic (December 2019 to February 2020) was largely driven by those who are economically inactive because they are students or for “other” reasons (Figure 9). In the latest three-month period, however, those who are inactive because they are students continued to decrease, while the increase in inactivity compared with the latest three-month period was driven by those who are inactive because of long-term sickness and because of “other” reasons.

The number of economically inactive people who stated that they wanted a job increased in the early stages of the coronavirus pandemic but has fallen since to a record low.

In October to December 2021, reports of redundancies in the three months prior to interview decreased by 1.2 per thousand compared with the previous three-month period to a record low of 2.6 per thousand employees (Figure 11).

From today we have started to publish a table showing potential redundancies, covering those notified by employers to the Insolvency Service via the "HR1" form, broken down by region and industry.

Actual and usual hours worked

Statistics for usual hours worked measure how many hours people usually work per week. Compared with actual hours worked, they are not affected by absences and so can provide a better measure of normal working patterns. For example, a person who usually works 37 hours a week but who was on holiday for a week would be recorded as working zero actual hours for that week, while usual hours would be recorded as 37 hours.

Workers temporarily absent from a job as a result of the coronavirus (COVID-19) pandemic would still be classed as employed; however, they would be employed working no hours. This has directly affected estimates of total actual hours worked during the coronavirus pandemic. Since the average actual weekly hours are the average of all in employment, those temporarily absent from a job also affected these estimates.

Economic inactivity

People not in the labour force (also known as economically inactive) are not in employment but do not meet the internationally accepted definition of unemployment because they have not been seeking work within the last four weeks and/or are unable to start work in the next two weeks. The economic inactivity rate is the proportion of people aged between 16 and 64 years who are not in the labour force.

Employment

Employment measures the number of people in paid work or who had a job that they were temporarily away from (for example, because they were on holiday or off sick). This differs from the number of jobs because some people have more than one job. The employment rate is the proportion of people aged between 16 and 64 years who are in employment.

Workers furloughed under the Coronavirus Job Retention Scheme (CJRS) or those who are self-employed but temporarily not in work, have a reasonable expectation of returning to their jobs after a temporary period of absence. Therefore, they are classified as employed under the International Labour Organization definition.

A more detailed explanation is available in our Guide to labour market statistics.

Redundancies

The redundancy estimates measure the number of people who were made redundant or who took voluntary redundancy in the three months before the Labour Force Survey interviews; it does not take into consideration planned redundancies.

Unemployment

Unemployment measures people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks. The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (that is, those in work plus those seeking and available to work) who are unemployed.

A more detailed glossary is available.

This bulletin relies on data collected from the Labour Force Survey (LFS), the largest household survey in the UK.

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the LFS Quality and Methodology Information (QMI) report.

The LFS performance and quality monitoring reports provide data on response rates and other quality-related issues for the LFS.

Reweighting

LFS responses published from 15 July 2021 have been reweighted to new populations using growth rates from HM Revenue and Customs' (HMRC's) Real Time Information (RTI), to allow for different trends during the coronavirus (COVID-19) pandemic. Our Impact of reweighting on Labour Force Survey key indicators, UK: 2020 article explains the reweighting methodology, which gives improved estimates of both rates and levels.

When the recent weighting methodology for LFS was applied, there was a small error in the calculation of the growth rates used. The impact on LFS economic activity estimates at national level is mostly below 0.1% and the impact on rates is less than 0.02 percentage points.

We plan to reweight Labour Force Survey (LFS) and Annual Population Survey (APS) datasets that include data from March 2020. We will provide further details on our plans including a timeline in our March Labour Market publication.

Coronavirus (COVID-19)

View more information on how labour market data sources are affected by the coronavirus (COVID-19) pandemic.

View a comparison of our labour market data sources and the main differences.

Making our published spreadsheets accessible

Following the Government Statistical Service (GSS) guidance on releasing statistics in spreadsheets we will be amending our published tables over the coming months to improve usability, accessibility and machine readability of our published statistics. To help users change to the new formats we will be publishing sample versions of a selection of our tables, and where practical, initially publish the tables in both the new and current formats. If you have any questions or comments, please email labour.market@ons.gov.uk.

Uncertainty in these data

The estimates presented in this bulletin contain uncertainty.

The figures in this bulletin come from the Labour Force Survey (LFS), which gathers information from a sample of households across the UK rather than from the whole population. The sample is designed to be as accurate as possible given practical limitations. Results from sample surveys are always estimates, not precise figures. This can have an impact on how changes in the estimates should be interpreted, especially for short-term comparisons.

As the sample gets smaller, the variability of the estimates gets larger. Estimates for small groups, which are based on small subsets of the LFS sample, are less reliable and tend to be more volatile than for larger aggregated groups.

In general, changes in the numbers (and especially the rates) reported in this bulletin between three-month periods are small and are not usually greater than the level that can be explained by sampling variability. Short-term movements in reported rates should be considered alongside longer-term patterns in the series and corresponding movements in other sources to give a fuller picture.

Information on the quality of estimates is available in our Labour Force Survey sampling variability table.

Comparability

The data in this bulletin follow internationally accepted definitions specified by the International Labour Organization (ILO). This ensures that the estimates for the UK are comparable with those for other countries.

The annual reconciliation report of job estimates article, which compares the latest workforce jobs series estimates with the equivalent estimates of jobs from the LFS and is usually published every March, has been postponed until we are able to take the latest adjustments to the LFS into account.

Further information is available in A guide to labour market statistics.