Employment in the UK: May 2021

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

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Cyswllt:
Email Bob Watson

Dyddiad y datganiad:
18 May 2021

Cyhoeddiad nesaf:
15 June 2021

2. Main points

  • January to March 2021 estimates show a quarterly decrease in the unemployment rate (the largest quarterly decrease since September to November 2015), while the economic inactivity rate increased, as it did during the first coronavirus (COVID-19) restrictions, and the employment rate increased for the first time since December 2019 to February 2020.

  • Total hours worked decreased on the quarter with the reintroduction of many coronavirus restrictions.

  • The UK employment rate was estimated at 75.2%, 1.4 percentage points lower than before the pandemic (December 2019 to February 2020) but 0.2 percentage points higher than the previous quarter.

  • The UK unemployment rate was estimated at 4.8%, 0.8 percentage points higher than December 2019 to February 2020 but 0.3 percentage points lower than the previous quarter.

  • The UK economic inactivity rate was estimated at 21.0%, 0.8 percentage points higher than December 2019 to February 2020 and 0.1 percentage point higher than the previous quarter.

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3. Coronavirus and measuring the labour market

Latest Labour Force Survey (LFS) estimates are based on interviews that took place from January to March 2021. Interviews relate to the period when a number of the government lockdown measures were reintroduced, but there was also some easing of restrictions towards the end of the period.

Because of the 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. More information can be found in Coronavirus and its impact on the Labour Force Survey.

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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.

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

More about economy, business and jobs

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4. Summary

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 (January to March 2021) estimates 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 (Figure 1).

Figure 1: January to March 2021 estimates show a quarterly decrease in the unemployment rate, while the economic inactivity rate and employment rate increased

UK employment, unemployment and economic inactivity rates, seasonally adjusted, between January to March 2006 and January to March 2021

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Part of the increase in employment and fall in unemployment was because of the quarterly net flow from unemployment to employment increasing to pre-pandemic levels (Figure 2).

Figure 2: There was a net flow of 132,000 from unemployment to employment

UK flows between employment, unemployment and economic inactivity (seasonally adjusted), between October to December 2020 and January to March 2021

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Notes:
  1. The figures in the boxes are the total stocks for those aged 16 to 64 years in January to March 2021 (from Dataset A02)

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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 (Figure 3), 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.

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5. Employment

Following an increase in the employment rate since early 2012, there had been a decrease since the start of the coronavirus (COVID-19) pandemic; however there was an increase in the latest quarter.

Full-time and part-time employees and self-employed

The quarterly increase in employment was mainly driven by an increase in the number of full-time employees. The increase was partly offset by a decrease in part-time workers, and self-employed people also decreased.

Employment status on the LFS is self-reported, with people classifying themselves as being either an employee or self-employed. Labour market flows estimates show that the recent increases in employees and decreases in self-employed people have been driven, in part, by a movement from self-employed to employee status. Of those who switch, the number who had changed jobs has been similar to pre-pandemic levels. Consequently, some of the fall in self-employment comes from people who have changed to classifying themselves as an employee, even though they have not changed jobs. The number of people in this group has decreased over recent periods but is still above pre-pandemic levels.

Hours worked

During January to March 2021, total actual weekly hours worked in the UK decreased from the previous quarter (Figure 4), coinciding with the introduction of further coronavirus lockdown measures which has stalled the recent recovery in total hours.

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6. Unemployment

The estimated unemployment rate had generally been falling since late 2013 up until the start of the coronavirus (COVID-19) pandemic. It has increased since then but has fallen slightly in the latest quarter.

There has been a decrease in short-term unemployment (Figure 5), while the number of people in longer-term unemployment categories increased.

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7. Economic inactivity

Since comparable records began in 1971, the economic inactivity rate has generally been falling; however, it has increased during the pandemic.

In terms of reasons for economic inactivity (Figure 6), the increase was largely driven by:

  • those who are economically inactive because they are students, which also drove the increase during the summer of 2020

  • those who are economically inactive because of "other" reasons

This increase was offset somewhat by the large decrease in people who were economically inactive because they were looking after family or home.

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8. Redundancies

In January to March 2021, reports of redundancies in the three months prior to interview decreased on the quarter (Figure 7), but were still higher than pre-pandemic levels.

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9. Employment in the UK data

Employment, unemployment and economic inactivity
Dataset A05 SA | Released 18 May 2021
Estimates of UK employment, unemployment and economic inactivity broken down into age bands.

Full-time, part-time and temporary workers
Dataset EMP01 SA | Released 18 May 2021
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 18 May 2021
Estimates for the hours that people in employment work in the UK.

Unemployment by age and duration
Dataset UNEM01 SA | Released 18 May 2021
Estimates of unemployment in the UK including a breakdown by sex, age group and the length of time people are unemployed.

Economic inactivity by reason
Dataset INAC01 SA | Released 18 May 2021
Estimates of those not in the UK labour force measured by the reasons given for economic inactivity.

Labour Force Survey sampling variability
Dataset A11 | Released 18 May 2021
Labour Force Survey (LFS) sampling variability (95% confidence intervals).

Labour Force Survey single month estimates
Dataset X01 | Released 18 May 2021
Labour Force Survey (LFS) single-month estimates of employment, unemployment and economic inactivity have been published by the Office for National Statistics (ONS) since 2004. Not designated as National Statistics.

Labour Force Survey weekly estimates
Dataset X07 | Released 18 May 2021
Labour Force Survey (LFS) weekly estimates of employment, unemployment, economic inactivity and hours in the UK. All estimates are calculated from highly experimental weekly Labour Force Survey datasets.

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10. 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.

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 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.

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11. 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

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.

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

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 on 17 May 2021 describes the new LFS weighting methodology which will be applied to results from July 2021.

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.

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12. Strengths and limitations

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.

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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.

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 further adjustments to the LFS are implemented.

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

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Manylion cyswllt ar gyfer y Bwletin ystadegol

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