UK Labour market overview – October 2021

The most recent ONS data show the labour market continuing to recover.

The number of payroll employees showed another monthly increase, up 207,000 to a record 29.2 million in September 2021, returning to pre-coronavirus (COVID-19) pandemic (February 2020) levels.

Following a period of employment growth and low unemployment, since the start of the pandemic the employment rate generally decreased, and the unemployment rate increased. However, since the end of 2020, both have shown signs of recovery. Our latest Labour Force estimates for June to August 2021 show the employment rate increased by 0.5 percentage points on the quarter, to 75.3%. and the unemployment rate decreased by 0.4 percentage points, to 4.5%. The economic inactivity rate is down 0.2 percentage points on the previous quarter, to 21.1%.

The number of job vacancies in July to September 2021 was a record high of 1,102,000, an increase of 318,000 from its pre-pandemic (January to March 2020) level; this was the second consecutive month that the three-month average has risen over one million. All industry sectors were above or equal to their January to March 2020 pre-pandemic levels in July to September 2021, with Accommodation and food service activities increasing the most, by nearly 50,000 (59%). The experimental single-month vacancy estimates recorded almost 1.2 million in September 2021, which is a record high.

Growth in average total pay (including bonuses) was 7.2% and regular pay (excluding bonuses) was 6.0% among employees for the three months June to August 2021. However, annual growth in average employee pay is being affected by temporary factors that have inflated the increase in the headline growth rate: base effects where the latest months are now compared with low base periods when earnings were first affected by the pandemic, and compositional effects where there has been a fall in the number and proportion of lower-paid employee jobs, therefore increasing average earnings.

PAYadvice.UK 12/10/2021

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