Labour Market LIVE Update


	Making learning and work count Labour market LIVE from Learning and Work Institute 19 March 2019 Unemployment is 1,338,000, a fall by 25,000 from last month’s published figure (the quarterly headline has fallen by 35,000) and the unemployment rate was 3.9%, down by 0.1 percentage points on last month and fell by 0.2 percentage points on last quarter. The ONS figure for claimant unemployed is 1,039,200, has risen by 27,000 on last month, and the claimant rate is 2.9%. The number of workless young people (not in employment, full-time education or training) is 926,000, down by 13,000 on the quarter, representing 13.3% of the youth population (down by 0.1 percentage points). Youth unemployment (including students) is 500,000, down by 10,000 on the month and up by 5,000 on the quarter. There are 1.6 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise slightly next month. The employment rate is 76.1% and (is up by 0.3 percentage points on last month’s published figure and rose by 0.4 percentage points in the preferred quarterly measure). Learning and Work Institute comment The labour market figures published on 19 March are an extraordinarily positive and surprising set of monthly numbers. Duncan Melville, chief economist at Learning and Work Institute, commented: ‘Today's labour market numbers are both very unexpected and very positive. Unemployment saw a modest fall of 35,000 in the quarter but that meant that the large increase in employment, up by more than 200,000, was reflected in a very welcome large fall in economic inactivity among people of working age - down by nearly 120,000 - with individuals entering the labour market. The unemployment rate has fallen below 4% for the first time since the mid-1970s, and the inactivity rate is the lowest on record since the ONS' official series starts in 1971. The employment rate is also at a record high on the ONS' official series, having moved above 76% for the first time since 1971. On longer run Bank of England data, the employment rate was last at this level in 1943 during the Second World War. The percentage of people employed on a temporary basis because they could not find a permanent job fell and is now at its lowest rate for over 10 years. In contrast, involuntary part-time working increased slightly. Wage growth continues at 3.4% in today's numbers and after accounting for inflation real wage growth was 1.4% - so living standards are rising. These labour market numbers are very positive but also very difficult to understand in the context of current weak GDP growth. In addition, survey data for recruitment showed a clear downturn for January which has not come through in today's numbers. Perhaps Dr Pangloss was right after all that "we live in the best of all possible worlds"! As the labour market tends to lag the overall economy, logic suggests that the labour market must soften soon, but after today's extraordinary set of numbers, it would be rash to firmly predict such an outcome any time soon.’ Paul Bivand, L&W's assistant director for statistics and analysis said: 'The claimant count figures (which are the main ones used at local authority level) continue up. Within these, there have been sharp switches from Jobseeker's Allowance (JSA) to Universal Credit. This is occurring for longer-term JSA claimants as well as new claimants. JSA off-flows are sharply up, for longer-term claimants. For example, the 12-15 month claimant group has an off-flow in February 2019, 72% higher than that in February 2018. Despite this, there are still 258,000 JSA claimants.' Employment increased by 222,000 between August to October 2018 and November 2018 to January 2019. In the last 12 months employment rose by 473,000. Unemployment fell by 35,000 between August to October 2018 and November 2018 to January 2019. and the unemployment rate fell by 0.2 percentage points to 3.9% in the quarter the lowest level since 1975. Economic inactivity also fell, by 117,000 between August to October 2018 and November 2018 to January 2019. and the inactivity rate is down by 0.3 percentage points to 20.7% in the quarter. The national claimant count is up by 27,000. This takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, increased by 65,300 in the month to February. Therefore, it should not be surprising that figures for local areas will show rises, compared to the national picture. The proportion of people leaving the claimant count (or the ‘leavers rate’) has risen. Jobseeker’s Allowance off-flow rates, for JSA claimants, rose. Youth unemployment is showing a quarterly fall. There are still 500,000 unemployed young people, and 348,000 (5.0% of the youth population) who are unemployed and not in full-time education. The proportion of unemployed young people (not counting students) who are not claiming Universal Credit or Jobseeker’s Allowance and therefore are not receiving official help with job search is now 45.2%. A total of 45,000 were counted as in employment while on ‘government employment and training programmes’, where the Office for National Statistics continues to count Work Programme (etc.) participants as ‘in employment’ by default. This number reduced by 8,000 this quarter. Self-employment increased by 60,000 this quarter. The number of employees rose by 152,000 in the quarter. Involuntary part-time employment increased by 33,000 this quarter to 0.9 million, 11.0% of all part-time workers.The proportion remains much higher than the 7.4% in 2004.
	Chart 1: UK unemployment (ILO) The latest unemployment figure is 1,338,000. It is down by 25,000 from the figure published last month. On the basis of later claimant count figures, Learning and Work Institute estimates that unemployment could rise, although this remains highly uncertain. The unemployment rate fell by 0.1 percentage points to 3.9%.
	Chart 2: Percentage unemployed not claiming Universal Credit or Jobseeker’s Allowance The proportion of unemployed people not claiming Universal Credit or Jobseeker’s Allowance has fallen to 25.6%; (342,000).
	Chart 3: Youth long-term unemployment (six months and over, 18-24) Youth long-term unemployment (which can include students) has fallen by 8,000 from last month’s figure and is now 137,000. The youth long-term JSA count (but not UC) remains far behind, at 16,000. Most young claimants have been claiming Universal Credit since the full roll-out of Universal Credit Live Service, so these JSA claimants are those with work records giving rights to contribution-related JSA, or those with more complex claims. The count fell by 2,600 this month.
	Chart 4: Adult long-term unemployment (12 months and over, 25+) Adult long-term unemployment on the survey measure is now 268,000. The Jobseeker’s Allowance measure is 138,500. Adult unemployed have increasingly been claiming Universal Credit, so these JSA claimants are those with work records giving rights to contribution-related JSA, or those with claims for family dependants.
	Chart 5: Unemployment rates by age The 18 to 24 year old unemployment rate (including students) is 10.4% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 2.9%. For those aged 50 and over it is 2.7%. The quarterly change is up 0.2 percentage points for 18 to 24 year olds, down 0.2 for 25 to 49 year olds, and no change for the over-50s.
	Chart 6: Young people not in employment, full-time education or training The number of out of work young people who are not in full-time education (926,000) has fallen in the past quarter by 13,000 , or 1.4%. The fall was among the inactive, with the number of unemployed young people not in full-time education or training rising by 25,000 to 348,000.
	Chart 7: Youth unemployment The number of unemployed young people has fallen by 10,000 since last month’s figures, to 500,000. Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants rose last month by 1,400, to 196,700. There are 157,000 unemployed young people who are not in education, and do not claim Universal Credit or Jobseeker’s Allowance, 45.2% of all unemployed young people who are not students.
	Chart 8: Jobseeker’s Allowance and Universal Credit claimant count The ONS headline Jobseeker’s Allowance and Universal Credit claimant count rose by 27,000 in February, taking the total to 1,039,200. ONS' claimant count before seasonal adjustment rose by 65,300 to 1,069,900. This change is directly comparable to the local level claimant count changes published today. L&W's seasonally adjusted estimate increased by 26,900 to 1,046,900.
	Chart 9: Jobseeker’s Allowance – new claims and leavers The number of new Jobseeker’s Allowance claims fell by 1,600 this month, to 24,400. Meanwhile the number of leavers rose, by 19,800, to 57,100. As Universal Credit is now fully rolled out, new Jobseeker's Allowance claims will be for the National Insurance Contribution-related JSA benefit, which can be received as well as Universal Credit (in the same way as Unemployment Benefit and Income Support worked before 1996).
	Chart 10: Jobseeker’s Allowance – claimant count leavers rate – leavers as percentage of ‘could leave’ The sharp increase in numbers leaving JSA (probably associated with the full rollout of Universal Credit), has produced a very sharp fall in the JSA leavers' rate.
	Chart 11: Jobseeker’s Allowance – claimants staying through each three-month threshold (seasonally adjusted) These measures show an increase in off-flow (or a fall in staying on JSA) at all lengths of JSA claim. The proportion staying beyond three months has fallen to 46.9%, still a historically high figure.
	Chart 12: Jobseeker’s Allowance – proportion of starters in month becoming longer-term unemployed The proportion of starters becoming 12-month claimants is now 13.6%. This is likely to fall over the next few months as the proportion of starters becoming 9-month claimants has fallen by 2.0 percentage points over the last three months. These figures are based on those in Chart 11, but show the patterns of the same people passing through successive quarterly thresholds.
	Chart 13: Vacancies – whole economy survey Vacancies (in the Office for National Statistics survey of the whole economy) fell slightly this month, to 854,000. As the number of vacancies is quite volatile, and frequently revised, the Office for National Statistics uses a three-month average.
	Chart 14: Unemployed people per vacancy There are 1.6 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise slightly next month.
	Chart 15: UK employment Employment increased by 116,000 on the figure published last month, to 32,714,000.
	Chart 16: Employment rate in the UK The employment rate rose by 0.4 percentage points over the quarter, to 76.1%.
	Chart 17: Claimants for inactive benefits and the economically inactive – inactivity benefits The number of people inactive owing to long-term sickness is broadly stable, while the latest benefit figures (August 2018) show falls. This chart shows claimants of Employment and Support Allowance, and Incapacity Benefit (the orange dots), compared with survey figures for the economically inactive owing to long-term sickness. The benefit figures do not yet include Universal Credit full service claimants.
	Chart 18: Claimants for inactive benefits and the economically inactive – lone parents The survey figures (showing those looking after family) rose while benefit measures are more volatile. Income Support estimates have decreased, and those for Jobseeker’s Allowance are now falling. The data source for benefits information has changes as DWP have stopped producing a specific table for lone parents claiming JSA.The numbers now are JSA claimants with a dependent child and no partner. This chart shows claimants of Income Support as lone parents, plus lone parents claiming Jobseeker’s Allowance (the orange dots) and survey figures for all those who are economically inactive looking after family (including couple families).
	Chart 19: Employment rate quarterly change in regions – November 2018 to January 2019 This quarter, 9 regions showed a rise in the employment rate, led by Northern Ireland and the South West. The employment rate fell in 3 regions, the North West, London and the East Midlands.
	Chart 20: Unemployment rate quarterly change in regions – November 2018 to January 2019 8 regions showed an improvement in the unemployment rate this quarter. 4 showed a worsening. The rises were led by Yorkshire and The Humber and the East of England.
	Chart 21: Inactivity rate quarterly change in regions – November 2018 to January 2019 Overall, there was a 0.3 percentage point fall in the inactivity rate. 4 regions showed rises in inactivity, led by the North West and London.
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