Labour market overview, UK: February 2022

Date
February 15, 2022
Issues
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Our latest Labour Force Survey (LFS) estimates for October to December 2021 show a continuing recovery in the labour market, with a quarterly increase in the employment rate and a decrease in the unemployment rate. However, economic inactivity has increased slightly on the quarter.

The UK employment rate increased by 0.1 percentage points on the quarter to 75.5%. The number of self-employed workers remains low following decreases seen during the coronavirus (COVID-19) pandemic, however the number of employees increased on the quarter to another record high. Job-to-job moves reached record numbers in October to December 2021, driven by resignations.

Our most timely estimate of payrolled employees shows another monthly increase (up 108,000) in January 2022 to a record 29.5 million.

The unemployment rate decreased by 0.2 percentage points on the quarter to 4.1%, while the economic inactivity rate increased by 0.1 percentage points to 21.2%. The increase in economic inactivity since the start of the coronavirus pandemic was largely driven by those who are economically inactive because they are students or for "other" reasons. In the latest three-month period however, those who are inactive because they are students continued to decrease, while the increase was driven by those who are inactive because of long-term sickness and "other" reasons.

The number of job vacancies in November 2021 to January 2022 rose to a new record of 1,298,400, an increase of 513,700 from its pre-coronavirus January to March 2020 level. However, the rate of growth in vacancies continued to slow down. The ratio of vacancies to every 100 employee jobs continued to rise, reaching a record high of 4.3 in November 2021 to January 2022, with the majority of industry sectors displaying record high ratios.

Growth in average total pay (including bonuses) was 4.3% and growth in regular pay (excluding bonuses) was 3.7% among employees in October to December 2021. In real terms (adjusted for inflation), total and regular pay fell on the year at negative 0.1% for total pay and negative 0.8% for regular pay. Previous months' strong growth rates were affected upwards by base and compositional effects. These temporary factors have largely worked their way out of the latest growth rates, however, a small amount of base effect for certain sectors may still be present. In July, we published the blog How COVID-19 has impacted the Average Weekly Earnings data, which explains the complexities of interpreting earnings data.

A guide to labour market data

Summary of labour market statistics Dataset A01 | Released 15 February 2022 Estimates of employment, unemployment and other employment-related statistics for the UK.

Real Time Information statistics Dataset Real Time Information statistics | Released 15 February 2022 Earnings and employment statistics from Pay As You Earn (PAYE) Real Time Information (RTI) (Experimental Statistics) seasonally adjusted.

Labour Force Survey single month estimates Dataset X01 | Released 15 February 2022 Labour Force Survey (LFS) experimental single-month estimates of employment, unemployment and economic inactivity.

Labour Force Survey weekly estimates Dataset X07 | Released 15 February 2022 Labour Force Survey (LFS) experimental weekly estimates of employment, unemployment, economic inactivity and hours in the UK.

A guide to labour market data Methodology | Released 15 December 2021 Summary of labour market datasets providing estimates of employment, unemployment, average weekly earnings and the number of vacancies. Tables are listed alphabetically and by topic.

View all related data on the related data page.

Alternatively, NOMIS provides free access to the most detailed and up-to-date UK labour market statistics.

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 because 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.

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 Coronavirus and the effects on UK labour market statistics, which details some of the challenges that we have faced in producing estimates at this time.

Our article Comparison of labour market data sources compares data sources and discusses some of the main differences.

Our latest data and analysis on the impact of coronavirus on the UK economy and population are available on our dedicated coronavirus web page. This is a 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.

Labour Force Survey reweighting

Labour Force Survey (LFS) responses published from 15 July 2021 have been reweighted to new populations using growth rates from HM Revenue and Customs (HMRC) Real Time Information (RTI). This is to allow for different trends during the coronavirus pandemic. The reweighting gives improved estimates of both rates and levels.

When the recent weighting methodology for the Labour Force Survey (LFS) was applied, there was a small error in the implementation. When calculating three-month averages for the Pay As You Earn (PAYE) RTI the months used were the previous three-month average. For example, for the October to December period, the RTI data used were that for September to November. This led to a slight overestimation of the non-UK population by approximately 0.5%. This represents less than half the size of the sampling variability. The size is roughly the same over the quarters of 2020 and the impact on January to December 2020 Annual Population Survey (APS) estimates is about 14,000 for EU born, 25,000 for non-EU born and 39,000 for non-UK born. The impact on LFS economic activity estimates at national level is mostly below 0.1% and the impact on rates is less than 0.02 percentage points.

We plan to reweight Labour Force Survey (LFS) and Annual Population Survey (APS) datasets that include data from March 2020. We will provide further details on our plans including a timeline in our March Labour Market publication.

Economic statistics governance after EU exit

Following the UK's exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK's statistical system.

At the centre of this new governance framework will be the new National Statistician's Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world-leading. The advice NSCASE provides to the National Statistician will span the full range of domains in economic statistics, including the national accounts, fiscal statistics, prices, trade and the balance of payments, and labour market statistics.

Making our published spreadsheets accessible

Following the Government Statistical Service (GSS) guidance on releasing statistics in spreadsheets we will be amending our published tables over the coming months to improve usability, accessibility and machine readability of our published statistics. To help users change to the new formats we will be publishing sample versions of a selection of our tables, and where practical, initially publish the tables in both the new and current formats. If you have any questions or comments, please email labour.market@ons.gov.uk.

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.

Coronavirus (COVID-19) latest data and analysis Web page | Updated as and when data become available Latest data and analysis on coronavirus (COVID-19) in the UK and its effect on the economy and society.

Economic activity and social change in the UK, real-time indicators Bulletin | Released 10 February 2022 Early experimental data and analysis on economic activity and social change in the UK. These faster indicators are created using rapid response surveys, novel data sources and experimental methods.

Business insights and impact on the UK economy Bulletin | Released 10 February 2022 The impact of challenges facing the economy and other events on UK businesses. Based on responses from the voluntary fortnightly business survey (BICS) to deliver real-time information to help assess issues affecting UK businesses and economy, including financial performance, workforce, trade, and business resilience.

Coronavirus and key workers in the UK Article | Released 15 May 2020 Estimates of the numbers and characteristics of those who could be considered as potential "key workers" in the response to coronavirus.

Changing trends and recent shortages in the labour market, UK Article | Released 20 December 2021 Changing trends and shortages in the labour market and how this affects different occupations and demographic groups. We look at where workers have entered or left the workforce and how this has changed in recent years. Interactive data visualisations also allow detailed exploration of different measures and changing patterns.