Employment in the UK: October 2021

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

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

• June to August 2021 estimates show a continuing recovery in the labour market, with a quarterly increase in the employment rate, while the unemployment and economic inactivity rates decreased.

• Total hours worked increased on the quarter with the relaxation of many coronavirus (COVID-19) restrictions.

• The UK employment rate was estimated at 75.3%, 1.3 percentage points lower than before the coronavirus pandemic (December 2019 to February 2020), but 0.5 percentage points higher than the previous quarter (March to May 2021).

• The UK unemployment rate was estimated at 4.5%, 0.5 percentage points higher than before the pandemic, but 0.4 percentage points lower than the previous quarter.

• The UK economic inactivity rate was estimated at 21.1%, 0.9 percentage points higher than before the pandemic, but 0.2 percentage points lower than the previous quarter.

Latest Labour Force Survey (LFS) estimates are based on interviews that took place from June to August 2021. Many of the government lockdown restrictions were eased during this period.

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, which calibrates to UK, EU and non-EU-born weighting populations for periods from January to March 2020. The impact on headline measures of rates is relatively small but there is a larger impact on estimates of levels and changes in levels. 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.

Figure 1: June to August 2021 estimates show a quarterly increase in the employment rate, while the unemployment rate and the economic inactivity rate decreased

UK employment, unemployment and economic inactivity rates, seasonally adjusted, between June to August 2006 and June to August 2021

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During the coronavirus (COVID-19) pandemic, there was a decrease in the employment rate and an increase in the economic inactivity and unemployment rates for both men and women (Figure 2). Over the last quarter, however, there have been increases in the employment rates and decreases in the unemployment rates for both men and women. There was a quarterly decrease in the inactivity rate for men but it is still above pre-pandemic rates, while the inactivity rate for women has returned to pre-pandemic rates.

Young people (those aged 16 to 24 years) have been particularly affected by the 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. Over the last quarter, however, there was a record increase in the employment rate and decreases in the unemployment and inactivity rates for young people (Figure 3).

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 workers decreased strongly during the pandemic, but has been increasing since April to June 2021 (Figure 4), making up the majority of the increase in employment in the latest period.

Hours worked

Total actual weekly hours worked in the UK increased by 39.9 million hours from the previous quarter, to 1.02 billion hours in June to August 2021 (Figure 5). This coincided with the relaxing of coronavirus lockdown measures, which had stalled the recent recovery in total hours. However, this is still 30.9 million below pre-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 quarterly decrease in unemployment was driven by those unemployed for up to 12 months. Quarterly decreases in those unemployed for up to 6 months have slowed in the latest periods, at around pre-pandemic levels, while those unemployed for between 6 and 12 months continued to decrease from the peak reached in early 2021. Meanwhile, those in long-term unemployment (unemployed for over 12 months) were largely unchanged on the quarter (Figure 6).

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

In terms of reasons for economic inactivity (Figure 7), the increase 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. Both categories are now decreasing.

The number of economically inactive who stated that they wanted a job increased right at the start of the pandemic, but has fallen since to a record low.

In June to August 2021, reports of redundancies in the three months prior to interview decreased by 0.2 per thousand on the quarter to 3.6 per thousand employees (Figure 8), similar to pre-coronavirus (COVID-19) pandemic levels.

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 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

Labour Force Survey (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 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 the Labour Force Survey (LFS) was applied, there was a small error in the implementation. When calculating three-month averages for the PAYE real-time information (RTI) the months used were the previous three-month average. For example, for the October to December period, the RTI data used was that for September to November. This led to a slight overestimation of the non-UK population by approximately 0.5%. This represents less than half the size of the sampling variability. The size is roughly the same over the quarters of 2020 and the impact on January to December 2020 APS estimates is about 14,000 for EU born, 25,000 for non-EU born and 39,000 for non-UK born. 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.

Coronavirus

View more information on how labour market data sources are affected by the coronavirus (COVID-19) pandemic, published on 6 May 2020.

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

Consultation on the Code of Practice for Statistics - proposed change to 9:30am release practice

On behalf of the UK Statistics Authority, the Office for Statistics Regulation (OSR) is conducting a consultation on the Code of Practice for Statistics, proposing changes to the 9:30am release practice. Please send comments by 21 December 2021 to: regulation@statistics.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 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.

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