Labour market overview, UK: December 2019

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

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This is an accredited national statistic.

Contact:
Email Debra Leaker

Release date:
17 December 2019

Next release:
21 January 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 August to October 2019

  • The UK employment rate was estimated at 76.2%, 0.4 percentage points higher than a year earlier but little changed on the previous quarter; despite just reaching a new record high, the employment rate has been broadly flat over the last few quarters.

  • The UK unemployment rate was estimated at 3.8%, 0.3 percentage points lower than a year earlier but largely unchanged on the previous quarter.

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

  • Estimated annual growth in average weekly earnings for employees in Great Britain slowed to 3.2% for total pay (including bonuses) and 3.5% for regular pay (excluding bonuses); the annual growth in total pay was weakened by unusually high bonus payments paid in October 2018 compared with more typical average bonus payments paid in October 2019.

  • In real terms (after adjusting for inflation), annual growth in total pay is estimated to be 1.5%, and annual growth in regular pay is estimated to be 1.8%.

  • There were an estimated 794,000 vacancies in the UK for September to November 2019; 20,000 fewer than last quarter and 59,000 fewer than a year earlier.

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The data in this bulletin come from surveys of households and businesses. It is not possible to survey every household and business each month, so these statistics are estimates based on samples.

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3. Employment

Employment measures the number of people aged 16 years and over in paid work. The employment rate is the proportion of people aged between 16 and 64 years who are in paid work.

Estimated employment rates for men and women aged between 16 and 64 years have generally been increasing since early 2012 but have levelled off in recent periods (as seen in Figure 1). For August to October 2019:

  • the estimated employment rate for people was a record high of 76.2%; this is 0.4 percentage points up on the year, but largely unchanged on the quarter

  • the estimated employment rate for men was 80.4%; this is 0.1 percentage points up on the year and on the quarter

  • the estimated employment rate for women was 72.0%; this is 0.8 percentage points up on the year, but 0.1 percentage points down on the quarter

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.

Estimates for August to October 2019 show 32.80 million people aged 16 years and over in employment, 309,000 more than a year earlier. This annual increase was mainly driven by women (up 235,000 on the year) and full-time workers (up 272,000 on the year). There was a 24,000 increase in employment on the quarter. This was driven by a quarterly increase for men (up 54,000) and full-time employees (up 50,000 to a record high of 20.71 million), but partly offset by a 30,000 decrease for women and a 61,000 decrease for part-time employees.

More information about employment can be found in the Employment in the UK bulletin, published alongside this release.

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4. 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 have been generally falling since late 2013 but have levelled off in recent periods (as seen in Figure 2).

For August to October 2019:

  • the estimated UK unemployment rate for all people was 3.8%, 0.3 percentage points lower than a year earlier but largely unchanged on the previous quarter

  • the estimated UK unemployment rate for men was 4.0%, 0.2 percentage points lower than a year earlier but largely unchanged on the previous quarter

  • the estimated UK unemployment rate for women was a record low of 3.5%, down 0.4 percentage points on the year and down 0.1 percentage points on the quarter

For August to October 2019, an estimated 1.28 million people were unemployed. This is 93,000 fewer than a year earlier and 673,000 fewer than five years earlier.

More information about unemployment can be found in the Employment in the UK bulletin, published alongside this release.

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5. 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 been generally falling (although it increased during recessions). This is because of a gradual fall in the economic inactivity rate for women.

For people aged between 16 and 64 years, for August to October 2019:

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

  • the estimated economic inactivity rate for men was 16.2%, up 0.1 percentage points on the year but down 0.1 percentage points on the quarter

  • the estimated economic inactivity rate for women was 25.3%, down 0.5 percentage points on the year but up 0.2 percentage points on the quarter

Estimates for August to October 2019 show 8.61 million people aged between 16 and 64 years not in the labour force (economically inactive). This was 60,000 fewer than a year earlier and 447,000 fewer than five years earlier.

More information about economic inactivity can be found in the Employment in the UK bulletin, published alongside this release.

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6. Earnings growth

The earnings estimates are not just a measure of pay rises, as they also reflect changes in the number of paid hours worked and changes in the structure of the workforce; for example, more high-paid jobs would have an upward effect on earnings growth rates.

The rate of pay growth has trended upwards since March to May 2017, reaching 3.9% in May to July 2019, the highest nominal pay growth rate since 2008. In August to October 2019, growth dropped to 3.2% for total pay and 3.5% for regular pay.

The growth in total pay is impacted downwards by unusually high bonuses having been paid in October 2018, whereas those in October 2019 are at more typical levels.

In real terms, annual pay growth has been positive since December 2017 to February 2018 and is now 1.5% for total pay and 1.8% for regular pay.

For October 2019, average regular pay, before tax and other deductions, for employees in Great Britain was estimated at £510 per week in nominal terms. The figure in real terms (constant 2015 prices) is £472 per week, which is still £1 (0.2%) lower than the pre-recession peak of £473 per week for April 2008.

The equivalent figures for total pay in real terms are £502 per week in October 2019 and £525 in February 2008, a 4.3% difference.

More information about earnings growth can be found in the Average weekly earnings in Great Britain bulletin, published alongside this release

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7. Vacancies

The estimated number of vacancies in the UK fell sharply during the recession of 2008 to 2009. Since 2012, it has generally increased, although it has been falling since early 2019. For September to November 2019, there were an estimated 794,000 vacancies in the UK, 20,000 fewer than for the previous quarter (June to August 2019) and 59,000 fewer than for the previous year.

More information about vacancies can be found in the Vacancies and jobs in the UK bulletin, published alongside this release.

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8. Labour market data

Summary of labour market statistics
Dataset A01 | Released 17 December 2019
Estimates of employment, unemployment and other employment-related statistics for the UK.

Employment, unemployment and economic inactivity
Dataset A02 SA | Released 17 December 2019
Estimates of UK employment, unemployment and economic inactivity for people aged 16 years and over and people aged from 16 to 64 years based on the Labour Force Survey (LFS).

Average weekly earnings
Dataset EARN01 | Released 17 December 2019
Estimates of Great Britain earnings growth based on the Monthly Wages and Salaries Survey.

Vacancies by industry
Dataset VACS02 | Released 17 December 2019
Estimates of the number of UK job vacancies for each industry, based on a survey of businesses.

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9. Glossary

Average weekly earnings

Average weekly earnings measures money paid by employers to employees in Great Britain before tax and other deductions from pay. The estimates are not just a measure of pay rises as they also reflect, for example, changes in the overall structure of the workforce. More high-paid jobs in the economy would have an upward effect on the earnings growth rate.

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

Vacancies

Vacancies are defined as positions for which employers are actively seeking recruits from outside their business or organisation. The estimates are based on the Vacancy Survey – a survey of businesses designed to provide estimates of the stock of vacancies across the economy, excluding agriculture, forestry and fishing (a small sector for which the collection of estimates would not be practical).

A more detailed Glossary is available.

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10. Measuring the data

The employment, unemployment and economic inactivity estimates rely on data collected from the Labour Force Survey (LFS) (a survey run by field interviewers with people across the UK every month).

The LFS performance and quality monitoring reports provide data on response rates and other quality related issues for the LFS, including breakdowns of response by LFS wave, region and question-specific response issues. The average weekly earnings and vacancies estimates rely on data collected from surveys of employers.

The following Quality and Methodology Information (QMI) reports pull together important qualitative information on the various dimensions of data quality and provide a summary of the methods used to compile the output:

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11. Strengths and limitations

Accuracy of the statistics: estimating and reporting uncertainty

The figures in this bulletin come from surveys, which gather information from a sample 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 quite small subsets of the Labour Force Survey (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.

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

Where to find data about uncertainty and reliability

Dataset A11 shows sampling variabilities for estimates derived from the LFS.

Sampling variability information for average weekly earnings growth rates is available from the “Sampling Variability” worksheets within datasets EARN01 and EARN03.

The sampling variability of the three-month average vacancies level is around plus or minus 1.5% of that level. Information on revisions is available in the labour market statistics revisions policy.

What’s new

In this month’s Labour market release, we have published new experimental monthly estimates of numbers receiving pay, and their earnings, from HM Revenue and Customs’ Pay As You Earn (PAYE) Real Time Information (RTI) administrative data. This is a joint HM Revenue and Customs and Office for National Statistics release.

Pre-release data

The Bank of England were granted exceptional pre-release access to the “Labour market overview, UK: December 2019” bulletin and accompanying tables at 8:30am on Monday 16 December 2019 so that the data were available for the Monetary Policy Committee (MPC) meeting held on that day. See exchange of letters requesting exceptional pre-release access so that data are available for discussion at the MPC.

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Contact details for this Statistical bulletin

Debra Leaker
labour.market@ons.gov.uk
Telephone: +44 (0)1633 455400