UK unemployment rate unexpectedly fell from April to June

The Office for National Statistics said that the most recent data show the labour market continuing to recover.

The number of payroll employees showed another monthly increase, up 182,000 to 28.9 million in July 2021. However, it remains 201,000 below pre-coronavirus (COVID-19) pandemic levels.

Following a period of employment growth and low unemployment, since the start of the pandemic, the employment rate has generally decreased, and the unemployment rate increased. However, since the end of 2020, both have shown signs of recovery. In the latest period (April to June 2021), there was a quarterly increase in the employment rate of 0.3 percentage points, to 75.1%, and a decrease in the unemployment rate of 0.2 percentage points, to 4.7%. The economic inactivity rate is down 0.2 percentage points on the previous quarter, to 21.1%.

There were an estimated 953,000 job vacancies in May to July 2021, a record high, having grown by 290,000 compared with the previous quarter and 168,000 more than its pre-pandemic level (January to March 2020). 

Growth in average total pay (including bonuses) was 8.8% and regular pay (excluding bonuses) was 7.4% in April to June 2021. However, annual growth in average employee pay is being affected by temporary factors that have inflated the increase in the headline growth rate. These are compositional effects where there has been a fall in the number and proportion of lower-paid employee jobs so increasing average earnings and base effects where the latest months are now compared with low base periods when earnings were first affected by the pandemic.