Employment in the UK: October 2020

Estimates of employment, unemployment and economic inactivity for the UK.

This is the latest release. View previous releases

13 October 2020

The effect of the coronavirus (COVID-19) pandemic on our capacity means we have reviewed the existing labour market releases and suspended some publications.

This will protect the delivery and quality of our remaining labour market outputs as well as ensuring we can respond to new demands as a direct result of the coronavirus. More details about the impact on labour market outputs can be found in our statement.

This is an accredited National Statistic. Click for information about types of official statistics.

Contact:
Email Bob Watson

Release date:
13 October 2020

Next release:
10 November 2020

1. Other pages in this release

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

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2. Main points for June to August 2020

  • Labour Force Survey estimates in this bulletin have been reweighted to account for the impact of the coronavirus on survey interviewing methods.

  • June to August figures show the unemployment rate and the number of redundancies continue to increase, while the employment rate continues to fall.

  • Although decreasing over the year, total hours worked had a record increase on the quarter, with the June to August period covering a time when a number of coronavirus (COVID-19) lockdown measures were eased.

  • The UK employment rate was estimated at 75.6%, 0.3 percentage points lower than a year earlier, and 0.3 percentage points lower than the previous quarter.

  • The UK unemployment rate was estimated at 4.5%, 0.6 percentage points higher than a year earlier and 0.4 percentage points higher than the previous quarter.

  • The UK economic inactivity rate was estimated at 20.8%, 0.2 percentage points lower than the previous year, but largely unchanged compared with the previous quarter.

  • The total number of weekly hours worked was 891.0 million, down 158.2 million hours on the previous year, but up a record 20.0 million hours compared with the previous quarter.

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The data in this bulletin come from the Labour Force Survey, a survey of households. It is not practical to survey every household each quarter, so these statistics are estimates based on a large sample.

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3. Coronavirus and measuring the labour market

Latest Labour Force Survey estimates are based on interviews that took place from the start of June to the end of August 2020. Interviews during June, July and August relate to the period when a number of the government lockdown measures aimed at protecting businesses and jobs during the coronavirus (COVID-19) pandemic started to be eased.

Due to Covid-19 and the suspension of face to face interviewing on 17 March, we had to make operational changes to the Labour Force Survey (LFS), particularly in the way that we contact households for initial interview, which moved to a "by telephone" approach. These changes have resulted in a response where certain characteristics have not been as well represented as previously. This is evidenced in a change in the balance of type of household that we are reaching. In particular, the proportion of households where people own their homes in the sample has increased and rented accommodation households has decreased.

To mitigate the impact of this non-response bias we have introduced housing tenure into the LFS weighting methodology for periods from January to March 2020 onwards. While not providing a perfect solution, this has redressed some of the issues that had previously been noted in the survey results. More information can be found in Coronavirus and its impact on the Labour Force Survey and in this blog.

This change in weighting methodology has resulted in revisions to all Labour Force Survey estimates for the periods January to March 2020 through to May to July 2020 and has consequently had an impact on recent movements for a number of the published series. More information about the impact of the change in weighting on main LFS indicators can be found in dataset X08 on the ONS website.

In this bulletin we focus on movements in the data based on the new weighting methodology; however, we also indicate the impact of the change in weighting by displaying the movements in the data based on the previous weighting methodology in each chart.

The International Labour Organization (ILO) definition of employment includes those who worked in a job for at least one hour and those temporarily absent from a job. Workers furloughed under the Coronavirus Job Retention Scheme or 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 ILO definition.

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4. Employment

Employment measures the number of people aged 16 years and over in paid work and those who had a job that they were temporarily away from. The employment rate is the proportion of people aged between 16 and 64 years who are in employment.

The estimated employment rate for people aged between 16 and 64 years had generally been increasing since early 2012, largely driven by an increase in the employment rate for women. However, there has been a decrease since January to March 2020, coinciding with the start of the coronavirus (COVID-19) pandemic (Figure 1).

For June to August 2020:

  • the estimated employment rate for all people was 75.6%; this is 0.3 percentage points down on the year, and 0.3 percentage points down compared with the previous quarter

  • the estimated employment rate for men was 79.1%; this is 1.1 percentage points down on the year and 0.6 percentage points down on the quarter

  • the estimated employment rate for women was 72.1%; this is 0.4 percentage points up on the year but down 0.1 percentage points on the quarter

Estimates for June to August 2020 show 32.59 million people aged 16 years and over in employment, 102,000 fewer than a year earlier. This annual decrease was driven by men in employment (down by 213,000 on the year to 17.04 million).

Employment decreased by 153,000 on the quarter; men in employment decreased by 115,000, while women in employment decreased by 38,000. This quarterly decrease was driven by people in employment aged 16 to 24 years, the self-employed and part-time workers, but was partly offset by increases in employment for people aged 25 to 64 years and full-time employees.

Imputation used for the Labour Force Survey was not designed to deal with the changes experienced in the labour market in recent months. Experimental work with adjusted methodology suggests the use of the existing methodology has little impact on the employment rate (less than 0.1 percentage points). Further information can be found in the section on Measuring the data.

The increase in the employment rate for women in recent years is partly a result of changes to the State Pension age for women, resulting in fewer women retiring between the ages of 60 and 65 years. However, since the equalisation of the State Pension age, the employment rate for women had continued to rise, though it has now decreased due to the impact of the coronavirus (COVID-19) pandemic.

Age group

Looking more closely at the change in employment over the quarter by age group (Figure 2), those aged 16 to 24 years decreased by 220,000 to a record low of 3.54 million (with a record decrease of 191,000 for those aged 18 to 24 years), while those aged 65 years and over decreased by 24,000 to 1.28 million. In contrast, there was a combined increase of 92,000 on the quarter for those aged 25 to 64 years, to 27.77 million (with women in the 25 to 34 years age group at a record high of 3.61 million).

Full-time and part-time

Looking at the split between full-time and part-time employment (Figure 3), the number of full-time workers has remained broadly flat whereas the number of part-time workers has continued to fall. Full-time workers have increased by 230,000 on the year, and 49,000 on the quarter, to 24.39 million (driven by increases for women). In contrast, the number of part-time workers decreased by 332,000 on the year, and 202,000 on the quarter, to 8.20 million (mainly driven by decreases for women).

Employees and self-employed

Looking at the estimates for June to August 2020 by type of employment (Figure 4), the number of self-employed workers has shown a sharp fall over the last quarter, which is not reflected in employees:

  • there were a record 27.90 million employees (85.6% of all people in employment), 92,000 more than the previous quarter

  • there were 4.56 million self-employed people (14.0% of all people in employment), 240,000 fewer than the previous quarter

These estimates for paid employees and self-employed people make up over 99% of all people in employment in the UK. The total employment figure also includes two other minor categories, as explained in the Guide to labour market statistics.

Employment status on the LFS is self-reported, with people classifying themselves as being either an employee or self-employed. Previous analysis indicates that some of the fall in self-employment comes from an increase in the number of people who had changed to classifying themselves as an employee, even though they have not changed jobs.

Hours worked

Since estimates began in 1971, up until the introduction of the coronavirus (COVID-19) lockdown measures, total hours worked by women had generally increased, reflecting increases in both the employment rate for women and the UK population. In contrast, total hours worked by men had been relatively stable because of falls in the employment rate for men, and increases in the share of part-time working, roughly offset by population increases.

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 directly impacted the total actual hours worked in June to August 2020. Since the average actual weekly hours are the average of all in employment, those temporarily absent from a job also impacted on those estimates. With the easing of lockdown restrictions in June and July and changes to the furlough scheme, the estimates show an increase for hours worked in June to August 2020 in comparison with the previous quarter.

Between March to May 2020 and June to August 2020, total actual weekly hours worked in the UK saw a record increase of 20.0 million, or 2.3%, to 891.0 million hours (Figure 5). The increase in total actual weekly hours worked over the quarter was mainly driven by a record increase in men's total hours worked (up 17.2 million hours).

Average actual weekly hours worked saw a record increase of 0.7 hours on the quarter to 27.3 hours. The average weekly hours worked by men saw a record increase of 1.2 hours to 31.0 hours, while women's hours saw an increase of 0.2 hours to 23.4 hours.

Imputation used for the Labour Force Survey was not designed to deal with the changes experienced in the labour market in recent months. Experimental work with adjusted methodology suggests that during the early stages of lockdown we were understating the full extent of the reduction in hours. However, now that hours are increasing, this has reversed so that the experimental methodology now suggests the actual number of hours are approximately 2.2% higher than stated.

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5. 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 (those in work plus those seeking and available to work) who are unemployed.

Estimated unemployment rates for both men and women aged 16 years and over had generally been falling since late 2013 but have increased over recent periods (Figure 6).

For June to August 2020:

  • the estimated UK unemployment rate for all people was 4.5%; this is 0.6 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 4.9%; this is 0.8 percentage points higher than a year earlier and 0.7 percentage points higher than the previous quarter

  • the estimated UK unemployment rate for women was 4.0%; this is 0.3 percentage points higher than a year earlier and 0.1 percentage points higher than the previous quarter

For June to August 2020, an estimated 1.52 million people were unemployed, up 209,000 on the year and up 138,000 on the quarter. The annual increase was the largest since September to November 2011 and the quarterly increase was the largest since May to July 2009.

Imputation used for the Labour Force Survey was not designed to deal with the changes experienced in the labour market in recent months. Experimental work with adjusted methodology suggests the use of the existing methodology has little impact on the unemployment rate (around 0.2 percentage points). Further information can be found in the section on Measuring the data.

The Claimant Count (Experimental Statistics)

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These Claimant Count statistics relate to 10 September 2020. Enhancements to Universal Credit as part of the UK government's response to the coronavirus mean that an increasing number of people became eligible for unemployment-related benefit support, although still employed.

Consequently, changes in the Claimant Count will not be due wholly to changes in the number of people who are unemployed. We are not able to identify to what extent people who are employed or unemployed have affected the numbers.

The Claimant Count is an Experimental Statistic that seeks to measure the number of people claiming benefit principally for the reason of being unemployed.

To achieve this, the Claimant Count has generally been a count of the appropriate benefits within the UK's current benefit regime that best meet that criteria. Currently this is a combination of claimants of Jobseeker's Allowance (JSA) and claimants of Universal Credit (UC) who fall within the UC "searching for work" conditionality.

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.

Under UC a broader span of claimants became eligible for unemployment-related benefit than under the previous benefit regime. During the roll-out of UC since 2013, movements in the Claimant Count have been significantly affected by this expanding eligibility, rather than labour market conditions. This impact has led to the Claimant Count being reclassified to an Experimental Statistic.

As part of the UK government's response to the coronavirus (COVID-19) pandemic, a number of enhancements were introduced to UC. These may have increased the number of employed people eligible for UC through their earnings falling below income thresholds.

Such claims will generally fall within the work search conditionality within UC.

Consequently, while some of any movement in the Claimant Count would be because of changes in the number of people who are out of work, a certain amount of the movement will be because of changes in the number of people in work who are eligible for UC as part of the government response. We are not able to identify to what extent these two factors have affected the numbers.

The Claimant Count increased in September 2020 to 2.7 million (Figure 7). This represents a monthly increase of 1.0% and an increase of 120.3%, or 1.5 million, since March 2020.

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6. Economic inactivity

Economic inactivity measures people without a job but who are not classed as unemployed because they have not been actively seeking work within the last four weeks and/or they are unable to start work within the next two weeks. Our headline measure of economic inactivity is for those aged between 16 and 64 years.

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). This is because of a gradual fall in the economic inactivity rate for women. Over recent years, the economic inactivity rate for men has been relatively flat (Figure 8).

For people aged between 16 and 64 years, for June to August 2020:

  • the estimated economic inactivity rate for all people was 20.8%; this is down by 0.2 percentage points on the year but largely unchanged on the quarter

  • the estimated economic inactivity rate for men was 16.7%; this is up by 0.4 percentage points on the year but down by 0.1 percentage points on the quarter

  • the estimated economic inactivity rate for women was 24.9%; this is down by 0.7 percentage points on the year but largely unchanged on the quarter

Estimates for June to August 2020 show 8.63 million people aged between 16 and 64 years not in the labour force (economically inactive). This was 426,000 fewer than five years earlier and 51,000 fewer than a year earlier.

The estimated fall of 426,000 in economic inactivity over the last five years was driven by women, with a decrease of 477,000. This reflects changes to the State Pension age, resulting in fewer women retiring between the ages of 60 and 65 years, as well as more women in younger age groups participating in the labour market.

Imputation used for the Labour Force Survey was not designed to deal with the changes experienced in the labour market in recent months. Experimental work with adjusted imputation methodology suggests the use of the existing methodology has little impact on the economic inactivity rate (around 0.2 percentage points). Further information can be found in the section on Measuring the data.

Looking at the movements in economic inactivity over the last year by reason (Figure 9), we see that the largest decrease was for people looking after family or home (down by a record 310,000 on the year, and down a record 108,000 on the quarter, to a record low of 1.67 million). However, the annual decrease in economic inactivity was partially offset by an increase in the number of people who were economically inactive for other reasons (up by 150,000 on the year, but down a record 104,000 on the quarter, to 1.13 million); the number of people in this category rose sharply during the initial phases of the lockdown, but is now decreasing from its peak level.

Other reasons include people who:

  • are waiting the results of a job application
  • have not yet started looking for work
  • do not need or want employment
  • have given an uncategorised reason for being economically inactive
  • have not given a reason for being economically inactive

The economic inactivity level was little changed on the quarter (down 3,000). The largest increase was for economically inactive students, which was up a record 214,000 on the quarter to 2.32 million. However, this increase was offset by the record quarterly decreases for those looking after family and home and those who were economically inactive for other reasons.

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7. Redundancies

Redundancies increased by 113,000 on the year, and a record 114,000 on the quarter, to 227,000 (Figure 10). The annual increase was the largest since April to June 2009, with the number of redundancies reaching its highest level since May to July 2009.

The redundancies 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.

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8. Employment in the UK data

Employment, unemployment and economic inactivity
Dataset A05 SA | Released 13 October 2020
Estimates of UK employment, unemployment and economic inactivity broken down into age bands.

Full-time, part-time and temporary workers
Dataset EMP01 SA | Released 13 October 2020
Estimates of UK employment including a breakdown by sex, type of employment, and full-time and part-time working.

Actual weekly hours worked
Dataset HOUR01 SA | Released 13 October 2020
Estimates for the hours that people in employment work in the UK.

Economic inactivity by reason
Dataset INAC01 SA | Released 13 October 2020
Estimates of those not in the UK labour force measured by the reasons given for economic inactivity.

Because of changes in the labour Force Survey (LFS) weighting methodology, we were not able to update all tables this month; see article . Those not updated include:

  • A06 Educational status and labour market status for people aged from 16 to 24
  • HOUR02 Usual weekly hours worked
  • HOUR03 Average hours worked by industry
  • UNEM01 Unemployment by age and duration
  • UNEM03 Unemployment by previous industrial sector
  • X01 LFS Single-month estimates
  • X05 Comparison of unemployment and the Claimant Count
  • X07 Weekly LFS estimates

These will be updated in our next labour market publication on 10 November 2020.

We apologise for any inconvenience.

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9. Glossary

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.

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

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.

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10. Measuring the data

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 QMI.

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

Coronavirus

In response to the developing coronavirus (COVID-19) pandemic, we are working to ensure that we continue to publish economic statistics. For more information, please see COVID-19 and the production of statistics.

This means we will need to ensure that information is provided faster, using new data sources, and changing how our surveys operate to ensure we provide the information necessary as the situation unfolds.

We continually review all publications and data published as part of the labour market release, which has led to the postponement of some publications and datasets to ensure that we can continue to publish our main labour market data. This will also protect the delivery and quality of our remaining outputs as well as ensuring we can respond to new demands as a direct result of the coronavirus.

For more information on how labour market data sources, among others, will be affected by the coronavirus pandemic, see the statement published on 27 March 2020. A further article published on 6 May 2020 detailed some of the challenges that we have faced in producing estimates at this time. A blog published in July 2020 by Jonathan Athow, Deputy National Statistician for Economic Statistics, explains some of the differences between sources. A blog published in October 2020 by Jonathan Athow outlines some of the latest methodological changes made to the Labour Force Survey. The article Coronavirus and its impact on the Labour Force Survey gives more detail about these changes.

The latest statement on the ONS’ future analytical work programme in response to the coronavirus was published on 24 September 2020 and includes information on labour market outputs.

Our latest data and analysis on the impact of the coronavirus on the UK economy and population is now available on our dedicated coronavirus webpage. This will be the hub for all special coronavirus-related publications, drawing on all available data.

Impact of the coronavirus on data collection

The Labour Force Survey design is based on interviewing households over five consecutive quarters. Generally, the first of these interviews, called Wave 1, takes place face-to-face, with most subsequent interviews, for Waves 2 to 5, conducted by telephone.

During March, we stopped conducting face-to-face interviews, instead switching to using telephone interviewing exclusively for all waves. This initially caused a significant drop in response.

New measures have been introduced to improve this, which have increased sample sizes, although they are still below normal Labour Force Survey sample sizes.

Impact of the coronavirus on survey imputation methodology

The normal imputation for non-response to the Labour Force Survey relies on rolling forward previous responses. Although this method is adequate under normal circumstances, it is not designed to deal with the changes experienced in the labour market in recent months. A new experimental imputation methodology has been researched to improve the measurement of the labour market at this time.

Because of time and system constraints, it has not been possible to fully integrate this methodology into the results within this release, but early indications suggest that:

  • there is little impact from the use of existing methodology on the headline measures of employment, unemployment and economic inactivity (around 0.2 percentage points)

  • measures relating to hours in this release understate the increase in the actual number of hours worked by approximately 2% to 3%

We hope to include more information in later releases as this work develops.

Impact of the coronavirus on survey weighting methodology

Because of the impact on data collection, different weeks throughout the quarter have different achieved sample sizes. To mitigate this impact on estimates the weighting methodology was enhanced to include weekly calibration to ensure that samples from each week had roughly equal representation within the overall three-month estimate. This meant that any impacts seen from changes in the labour market in those weeks would be fully represented within the estimates.

Due the suspension of face to face interviewing in March 2020, we had to make operational changes to the Labour Force Survey, particularly in the way that we contact households for initial interview, which moved to a "by telephone" approach. These changes have resulted in a response where certain characteristics have not been as well represented as previously. This is evidenced in a change in the balance of type of household that we are reaching. In particular, the proportion of households where people own their homes in the sample has increased and rented accommodation households has decreased.

To mitigate the impact of this non-response bias we have introduced housing tenure into the LFS weighting methodology for periods from January to March 2020 onwards. While not providing a perfect solution, this has redressed some of the issues that had previously been noted in the survey results. More information can be found in an article Coronavirus and its impact on the Labour Force Survey on the ONS website.

In addition, further details about the impact of the change in weighting on main LFS indicators can be found in dataset X08 on the ONS website.

Impact of government measures to protect businesses on the Labour Force Survey estimates

During late March, the government announced a number of measures to protect UK businesses. This included the Coronavirus Job Retention Scheme (CJRS), also referred to as furloughing, and the Self-Employment Income Support Scheme (SEISS).

The Office for National Statistics (ONS) classifies people within the labour market in line with International Labour Organization (ILO) definitions. Under the ILO definition employment includes employed persons "at work", that is, who worked in a job for at least one hour; and employed persons "not in work" because of temporary absence from a job, or to working time arrangements.

Under the current schemes it is likely that workers would have an expectation of returning to that job and would consider the absence from work as temporary. Therefore, those people absent from work under the current schemes would generally be classified as employed under ILO definitions.

In many cases, however, they would be employed but not in work. This absence would have an impact on the total hours worked. This would also be reflected in the average actual hours worked, which are based on the average hours per person employed, rather than the average hours per person at work. While actual hours would be significantly affected, there is unlikely to be any impact on usual hours, which would reflect normal working patterns.

After EU withdrawal

As the UK leaves the EU, it is important that our statistics continue to be of high quality and are internationally comparable. During the transition period, those UK statistics that align with EU practice and rules will continue to do so in the same way as before 31 January 2020.

After the transition period, we will continue to produce our labour market statistics in line with the UK Statistics Authority's Code of Practice for Statistics and in accordance with International Labour Organization (ILO) definitions and agreed international statistical guidance.

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11. Strengths and limitations

Uncertainty in this 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 such as time and cost constraints. 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 number of people available in the sample gets smaller, the variability of the estimates that we can make from that sample size gets larger. Estimates for small groups (for example, unemployed people aged between 16 and 17 years), which are based on small subsets of the LFS sample, are less reliable and tend to be more volatile than for larger aggregated groups (for example, the total number of unemployed people).

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.

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.

An annual reconciliation report of job estimates is published every March comparing the latest workforce jobs (WFJ) estimates with the equivalent estimates of jobs from the Labour Force Survey (LFS).

The concept of employment (measured by the LFS as the number of people in work) differs from the concept of jobs, since a person can have more than one job and some jobs may be shared by more than one person. The LFS, which collects information mainly from residents of private households, is the preferred source of statistics on employment. The WFJ series, which is compiled mainly from surveys of businesses, is the preferred source of statistics on jobs by industry, since it provides a more reliable industry breakdown than the LFS. During the coronavirus (COVID-19) pandemic the LFS and WFJ series may have additional differences because a person's perception of their attachment to a job may differ from the business's perception of that job. It is also important to note that LFS is based on interviews throughout the coverage period, whereas the WFJ series relates to a specific date. This difference can be significant in a labour market that is experiencing rapid changes.

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

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Contact details for this Statistical bulletin

Bob Watson
labour.market@ons.gov.uk
Telephone: +44 (0)1633 455070