Labour market overview, UK: May 2021

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

• Employment in the UK

• Labour market in the regions of the UK

• Public sector employment, UK

• Vacancies and jobs in the UK

• Average weekly earnings in Great Britain

The latest figures suggest that the jobs market has been broadly stable in recent months, with some early signs of recovery.

The number of payroll employees has increased for the fifth consecutive month but remains 772,000 below pre-coronavirus (COVID-19) pandemic levels. Since February 2020, the largest falls in payrolled employment have been in the hospitality sector, among those aged under 25 years, and those living in London.

Following a period of employment growth and low unemployment, since the start of the pandemic, employment has generally been decreasing and unemployment increasing. However, the latest estimates for January to March 2021 show signs of recovery, with a quarterly increase in the employment rate. Meanwhile, there was a quarterly decrease in the unemployment rate and the economic inactivity rate increased on the quarter. With the reintroduction of many coronavirus restrictions, total hours worked decreased on the quarter.

Young people (those aged 16 to 24 years) have been particularly affected by the pandemic. Over the last quarter there was a decrease in the employment and unemployment rates for young people, particularly amongst 16- to 17-year-olds. This suggests that more young people are staying in education and not looking for work, which is supported by the record economic inactivity rate of young people in full-time education.

In recent months, the number of people temporarily away from work has fallen including both those away from work because of the pandemic receiving no pay and those on full pay. Those receiving partial pay while away from work has remained stable over the period.

In February to April 2021, the number of vacancies reached its highest level since January to March 2020, with most industries displaying increases over the quarter, most notably, accommodation and food service activities. Both the experimental single-month vacancies and experimental Adzuna measures showed strong increases in April. However, the headline number of job vacancies remains below the pre-pandemic levels, with arts, entertainment and recreation, and accommodation and food service activities industries the worst affected.

Annual growth in average employee pay continued; the growth is driven in part by compositional effects of a fall in the number and proportion of lower-paid employee jobs. Bonus payments in February and March were slightly down on last year, causing slower total pay growth rate compared with regular pay growth.

Latest labour market indicators

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 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 A 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; this is 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).

Pay As You Earn (PAYE) Real Time Information (RTI)

These data come from HM Revenue and Customs' (HMRC's) Pay As You Earn (PAYE) Real Time Information (RTI) system. They cover the whole population rather than a sample of people or companies, and they will allow for more detailed estimates of the population. The release is classed as Experimental Statistics as the methodologies used to produce the statistics are still in their development phase. As a result, the series are subject to revisions.

A more detailed glossary is available.

Our bulletins will be shorter and more focused on the main messages and most important trends in response to user feedback. Read more on this and how to send us feedback on how our publications are evolving.

Coronavirus

For more information on how labour market data sources are affected by the coronavirus (COVID-19) pandemic, see the article published on 6 May 2020, which details some of the challenges that we have faced in producing estimates at this time.

An article published 11 December 2020 compares our labour market data sources and discusses some of the main differences.

Labour Force Survey (LFS) responses are weighted to official 2018-based population projections on demographic trends that pre-date the coronavirus pandemic. In our Coronavirus and the impact on payroll employment article we analyse the population totals used in the LFS weighting process and state our intention to make adjustments. Rates published from the LFS remain robust; however, levels and changes in levels should be used with caution. This will particularly affect estimates for country of birth, nationality, ethnicity and disability. Consequently recent level estimates for these measures have been temporarily suspended until they are reweighted to better account for recent population movements.

An article published 17 May 2021 describes the new LFS weighting methodology, which will be applied to results from July 2021.

Our latest data and analysis on the impact of the coronavirus on the UK economy and population are available on our dedicated coronavirus web page. This is the hub for all special coronavirus-related publications, drawing on all available data. In response to the developing coronavirus 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.

More information on measuring the data is available in our previous release.

End of EU exit transition period

As the UK enters into a new Trade and Cooperation Agreement with the EU, the UK statistical system will continue to produce and publish our wide range of economic and social statistics and analysis. We are committed to continued alignment with the highest international statistical standards, enabling comparability both over time and internationally, and ensuring the general public, statistical users and decision makers have the data they need to be informed.

As the shape of the UK's future statistical relationship with the EU becomes clearer over the coming period, the ONS is making preparations to assume responsibilities that as part of our membership of the EU, and during the transition period, were delegated to the statistical office of the EU, Eurostat. This includes responsibilities relating to international comparability of economic statistics, deciding what international statistical guidance to apply in the UK context and to provide further scrutiny of our statistics and sector classification decisions.

In applying international statistical standards and best practice to UK economic statistics, we will draw on the technical advice of experts in the UK and internationally, and our work will be underpinned by the UK's well established and robust framework for independent official statistics, set out in the Statistics and Registration Service Act 2007. Further information on our proposals will be made available later this year.

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.

The estimates presented in this bulletin contain uncertainty.

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

Information on revisions is available in the Labour market statistics revisions policy.

Information on the strengths and limitations of this bulletin is available in our previous release.