Labour market overview, UK: August 2019

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

• Employment in the UK

• Average weekly earnings in Great Britain

• Vacancies and jobs

• The UK employment rate was estimated at 76.1%, the joint-highest on record since comparable records began in 1971.

• The UK unemployment rate was estimated at 3.9%; lower than a year earlier (4.0%); on the quarter the rate was 0.1 percentage points higher.

• The UK economic inactivity rate was estimated at 20.7%, a joint-record low.

• Estimated annual growth in average weekly earnings for employees in Great Britain increased to 3.7% for total pay (including bonuses) and 3.9% for regular pay (excluding bonuses).

• In real terms (after adjusting for inflation), total pay is estimated to have increased by 1.8% compared with a year earlier, and regular pay is estimated to have increased by 1.9%.

Employment

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

Estimated employment rates for men and women aged from 16 to 64 years have been generally increasing since early 2012. For April to June 2019, the estimated employment rate:

• for everyone was estimated at 76.1%, the joint-highest on record since comparable records began in 1971

• for men was 80.1%; unchanged from a year earlier but down 0.2 percentage points on the quarter, the third consecutive quarterly decrease

• for women was 72.1%, the highest since comparable records began in 1971

The increase in the employment rate for women in recent years is partly because of changes to the State Pension age for women, resulting in fewer women retiring between the ages of 60 and 65 years.

Estimates for April to June 2019 show 32.81 million people aged 16 years and over in employment, this is a record high and 425,000 more than for a year earlier. This annual increase of 425,000 was mainly because of more people working full-time (up 262,000 on the year to reach 24.11 million). Part-time working also showed an increase of 162,000 on the year to reach 8.70 million.

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

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 the proportion of all employed and unemployed people (not the proportion of the total population) who are unemployed.

Estimated unemployment rates for both men and women aged 16 years and over have been generally falling since late 2013.

For April to June 2019, the estimated unemployment rate:

• for everyone was 3.9%, lower than a year earlier (4.0%), on the quarter the rate was 0.1 percentage points higher

• for men was 4.1%, slightly higher than a year earlier (4.0%)

• for women was 3.6%, the joint-lowest since comparable records began in 1971

For April to June 2019, an estimated 1.33 million people were unemployed, 33,000 fewer than a year earlier and 732,000 fewer than five years earlier. Looking in more detail at this fall of 732,000 unemployed people over the last five years:

• people unemployed for up to 6 months fell by 197,000 to 793,000

• people out of work for between 6 and 12 months fell by 137,000 to 194,000

• the largest fall was for people unemployed for over one year (down 398,000 to 342,000)

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

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 from 16 to 64 years.

Since comparable records began in 1971, the economic inactivity rate for all people aged from 16 to 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 from 16 to 64 years, for April to June 2019, the estimated economic inactivity rate:

• for all people was 20.7%, a joint-record low

• for men was 16.3%

• for women was 25.1%, a record low

Estimates for April to June 2019 showed 8.56 million people aged from 16 to 64 years not in the labour force (economically inactive). This was:

• 176,000 fewer than a year earlier

• 445,000 fewer than five years earlier

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

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.

Pay in real terms is calculated as nominal average weekly earnings, deflated by the Consumer Prices Index including owner occupiers’ housing costs (CPIH).

Annual growth in both total pay (including bonuses) and regular pay (excluding bonuses) has accelerated in recent months. Two contributing factors were introduced in April that have a potential impact in this reporting period, these are:

• pay increases for some NHS staff, which will impact public sector pay growth

• the introduction of the new National Living Wage rate (4.9 percentage points higher than the 2018 rate) and National Minimum Wage rates, which will impact the lowest-paid workers in sectors such as wholesaling, retailing, hotels and restaurants

For June 2019, average regular pay, before tax and other deductions, for employees in Great Britain was estimated at:

• £505 per week in nominal terms

• £469 per week in real terms (constant 2015 prices), higher than the estimate for a year earlier (£460 per week), but £4 (0.8%) lower than the pre-recession peak of £473 per week for April 2008

The equivalent figures for total pay are £499 per week in June 2019 and £525 in February 2008, a 5.0% difference.

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

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 May to July 2019, there were an estimated 820,000 vacancies in the UK, 20,000 fewer than a year earlier and 20,000 fewer than for the previous quarter (February to April 2019).

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

Summary of labour market statistics
Dataset A01 | Released 13 August 2019
Estimates of employment, unemployment and other employment-related statistics for the UK.

Employment, unemployment and economic inactivity
Dataset A02 SA | Released 13 August 2019
Estimates of UK employment, unemployment and inactivity for people aged 16 years and over and people aged from 16 to 64 years based on the Labour Force Survey.

Average weekly earnings
Dataset EARN01 | Released 13 August 2019
Estimates of Great Britain earnings growth based on the Monthly Wages and Salaries Survey.

Vacancies by industry
Dataset VACS02 | Released 13 August 2019
Estimates of the number of UK job vacancies for each industry based on a survey of businesses.

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 from 16 to 64 years who are not in the labour force.

Employment

Employment measures the number of people in paid work and differs from the number of jobs because some people have more than one job. The employment rate is the proportion of people aged from 16 to 64 years who are in paid work.

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.

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

The Labour Force Survey performance and quality monitoring reports provide data on response rates and other quality-related issues for the Labour Force Survey (LFS), including breakdowns of response by LFS wave, region and by 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, as well as providing a summary of the methods used to compile the output:

• Labour Force Survey Quality and Methodology Information

• Average weekly earnings (AWE) Quality and Methodology Information

• Vacancy Survey Quality and Methodology Information

Re-assessment of labour market estimates

The Office for Statistics Regulation (OSR) will be carrying out a planned re-assessment of labour market employment estimates, which will work towards publishing a set of recommendations in early 2020. As part of this assessment, the OSR may contact you to: gather feedback on your use of labour market estimates; listen to your suggestions on ways we can build on our current engagement opportunities; and capture examples of where we have worked (or are working) together to improve communication and use of our statistics.

The three sections of the recommendations report will cover trustworthiness, quality and value. OSR will coordinate engagement with yourselves but please feel free to contact David Freeman (david.freeman@ons.gov.uk) or Matt Hughes (matthew.hughes@ons.gov.uk) if you wish to discuss further.

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 from 16 to 17 years), which are based on quite small subsets of the Labour Force Survey 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 Labour Force Survey.

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.