The number of payroll employees showed another monthly increase, up 241,000 to 29.1 million in August 2021, returning to pre-coronavirus (COVID-19) pandemic (February 2020) levels. All regions except London, Scotland and South East are now above pre-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 has increased. However, since the end of 2020, both have shown signs of recovery. In the latest period (May to July 2021), there was a quarterly increase in the employment rate of 0.5 percentage points, to 75.2%, and a decrease in the unemployment rate of 0.3 percentage points, to 4.6%. The economic inactivity rate is down 0.3 percentage points on the previous quarter, to 21.1%.
Young people (those aged 16 to 24 years) have been particularly affected by the pandemic, with the employment rate decreasing and the unemployment and economic inactivity rates increasing by more than seen for those aged 25 years and over. Over the last quarter, however, there was a strong increase in the employment rate and decrease in the unemployment and inactivity rates for young people.
The number of job vacancies in June to August 2021 was 1,034,000, which is the first time vacancies have risen over 1 million since records began, and is now 249,000 above its pre-pandemic January to March 2020 level. Vacancies grew on the quarter in June to August 2021 by 269,300 (35.2%), with all industry sectors increasing their number of vacancies and the majority reaching record levels; the largest increase was seen in accommodation and food service activities, which rose by 57,600 (75.4%).
Growth in average total pay (including bonuses) was 8.3% and regular pay (excluding bonuses) was 6.8% among employees for the three months May to July 2021. However, annual growth in average employee pay is being affected by temporary factors that have inflated the increase in the headline growth rate: base effects where the latest months are now compared with low base periods when earnings were first affected by the coronavirus pandemic, and compositional effects where there has been a fall in the number and proportion of lower-paid employee jobs, therefore increasing average earnings.