Signs of recovery in UK labour market

interactive investor comments on latest ONS employment data for Q1 2021.

The Office for National Statistics has today published employment figures for January – March 2021.

Myron Jobson, Personal Finance Campaigner, interactive investor, says: “Things are looking up in the labour market. The surprise fall in unemployment for the first three months of the year to 4.8%, up 0.8 percentage point from the pre-pandemic level, is the clearest indication yet that the furlough scheme has done its job of helping people stay in employment during the coronavirus lockdown. This is good news, and the best may be yet to come providing new variants of Covid-19 do not scupper the road map to the safe and full reopening of society.

“The elephant in the room is the cost of the furlough scheme. It will be high, there is no getting away from it, and taxpayers will likely foot the bill - through tax hikes and potential spending cuts. But for now, signs of recovery in the labour market are welcome rays of light as the UK emerges from a dark period from both an economic and humanitarian standpoint.”

Key points include:

• The UK unemployment rate was estimated at 4.8%, 0.8 percentage points higher than December 2019 to February 2020 but 0.3 percentage points lower than the previous quarter.
• The number of payroll employees has increased for the fifth consecutive month but remains 772,000 below pre-coronavirus (COVID-19) pandemic levels. 
• Redundancies decreased on the quarter but are still higher than pre-pandemic levels.
• Vacancies increased on the quarter but still below pre-pandemic levels.