UK Employment Up in May; Vacancies Rose Sharply

MAR-MAY LFS JOBLESS RATE 4.8% VS 4.8% PRIOR

MAR-MAY AVG TOTAL EARNINGS +7.3% VS +5.7% PRIOR

MAR-MAY AVG EARNINGS EX-BONUS +6.6% VS +5.7% PRIOR

JUN CLAIMANT COUNT DOWN 114,800 to 2,322,200

• The UK unemployment rate was 4.8% in May, in contrast to markets looking for the jobless rate to register at 4.7%, although the ONS noted that the data was reweighted for the May survey.
• While the employment rate edged slightly up by 0.1pp to 74.8% in May, the inactivity rate was up 0.1pp as well and rose to 21.3%.
• More up-to-date PAYE data showed a m/m increase of 356,000 in the number of payrolled employees in Jun, indicating that the labour market continues to recover. However, compared to Feb 2020, there were still 206,000 fewer people in payrolled employment, but for the first time some regions were above pre-pandemic levels.
• There were 862,000 vacancies in Apr 2021 to Jun 2021, 241,000 more than in the previous quarter and 77,500 more than before the crisis. All but one sector recorded a gain with the hospitality sector being the main driver.
• Redundancies fell to 3.8 people per 1000 employees, while hours worked rose 0.7 hours to 30.5 hours.
• Wages grew strongly in the three months to May with total nominal pay rising by 7.3%, the highest on record. However, the ONS noted that pay growth is affected by compositional effects and base effects and the underlying picture suggests a more modest pay rise.