UK unemployment rate unexpectedly stabilised from March to May

According to the report from Office for National Statistics, March to May figures show weakening employment rates, with self-employed and part-time workers seeing reductions; despite these falls, unemployment is not rising, because of increases in people out of work, but not currently looking for work; the reduction in total hours worked is a record both on the year and the quarter despite a third of the period covered being prior to the implementation of coronavirus (COVID-19) measures.

The UK employment rate was estimated at 76.4%, 0.3 percentage points higher than a year earlier but 0.2 percentage points down on the previous quarter.

The UK unemployment rate was estimated at 3.9%, 0.1 percentage points higher than a year earlier but largely unchanged compared with the previous quarter. Economists had expected an increase to 4.2%.

The UK economic inactivity rate was estimated at 20.4%, 0.4 percentage points lower than the previous year but 0.2 percentage points up on the previous quarter.

The total number of weekly hours worked was 877.1 million, down a record 175.3 million hours on the previous year and down a record 175.1 million hours on the previous quarter.

Employee pay growth slowed noticeably in April and maintained a similar pattern in May. Pay is now growing slower than inflation, especially in industries where furloughing is most prominent.

Growth in average total pay (including bonuses) among employees slowed sharply in March to May to be negative (at negative 0.3%) for the first time since April to June 2014; regular pay growth (excluding bonuses) slowed to 0.7%. Single month growth in average weekly earnings for May 2020 was negative 1.2% for total pay and 0% for regular pay.