UK unemployment rate unexpectedly fell, average earnings growth slowed

The Office for National Statistics said that the latest figures suggest that the jobs market has been broadly stable in recent months.

Data from our Labour Force Survey (LFS), for the three months to February 2021, are little changed on the quarter. Estimates show a small quarterly decrease in the unemployment rate while the economic inactivity rate increased, as it did during the first coronavirus restrictions; the employment rate continued to fall. With the reintroduction of many coronavirus restrictions, total hours worked decreased on the quarter.

The number of job vacancies in January to March 2021 fell by nearly 23% on the year; arts, entertainment and recreation, and accommodation and food service activities continue to be the worst affected. 

56,000 fewer people were in payrolled employment in March 2021 when compared with February 2021.

The UK employment rate was estimated at 75.1%, 1.4 percentage points lower than a year earlier and 0.1 percentage points lower than the previous quarter.

The UK unemployment rate was estimated at 4.9%, 0.9 percentage points higher than a year earlier but 0.1 percentage points lower than the previous quarter.

The UK economic inactivity rate was estimated at 20.9%, 0.7 percentage points higher than a year earlier and 0.2 percentage points higher than the previous quarter.

There were an estimated 607,000 job vacancies in January to March 2021, which is a 22.7% fall compared with a year ago.

Growth in average total pay (including bonuses) among employees for the three months December 2020 to February 2021 was 4.5%, and growth in regular pay (excluding bonuses) was 4.4%; it is estimated that by removing the compositional effect, the underlying wage growth is around 2.5% for total and regular pay.