Unemployment rate rises to 5.1%

A raised unemployment rate coincided with accelerated growth in Average Weekly Earnings over the year to December 2020. Neither yet reflected the impact of the January 2021 lockdown, but both underline the continuing importance of the furlough scheme.

The unemployment rate, estimated from the Labour Force Survey, continued to increase, reaching 5.1%. That was a 1.3 percentage-point rise over the year, but was still far below the 8%-plus rates seen after the 2008-09 financial crash.

Alternative figures show a fall of 726,000 in the number of payroll employees since February 2020.

But larger falls were seen at the start of the pandemic and small increases were recorded in the last two months.

Average Weekly Earnings, including bonus payments, shrank in the private sector between April and July — by up to 3.8% in manufacturing. It shows where reduced earnings for employees on furlough (whose wages were not topped up) had the biggest impact, coupled with workforce changes.

But even with millions still laid off, private sector earnings growth overtook the public sector in November and December, reaching a high of 5.6%.

Previously-postponed bonuses helped, but there was still “underlying pay growth” of around 3%, said the Office for National Statistics.

https://www.ons.gov.uk/employmentandlabourmarket/peoplenotinwork/unemployment

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours