Making learning and work count

Labour market LIVE from Learning and Work Institute
16 April 2019

  • Unemployment is 1,343,000, which rose by 4,000 from last month’s published figure (quarterly headline down by 27,000) and the unemployment rate at 3.9%, showed no change on last month and has fallen by 0.1 percentage points on last quarter.
  • The ONS figure for claimant unemployed is 1,066,200, increased by 28,300 on last month, and the claimant rate is 3.0%.
  • The number of workless young people (not in employment, full-time education or training) is 916,000, down by 32,000 on the quarter, representing 13.2% of the youth population (down by 0.4 percentage points).
  • Youth unemployment (including students) is 493,000, down by 19,000 on the quarter.
  • There are 1.6 unemployed people per vacancy.
  • The employment rate is 76.1% (showed no change on last month’s published figure and has risen by 0.4 percentage points in the preferred quarterly measure).

Learning and Work Institute comment:

The labour market figures published on 16 April suggest that the labour market may be starting to slow.

Duncan Melville, chief economist at Learning and Work Institute, commented:

‘Looking at the quarterly changes to December 2018 to February 2019 one could easily conclude that the labour market is still performing strongly. Employment is up strongly in the quarter, and while unemployment fell by much less, economic inactivity was also down substantially. So, these numbers appear to suggest that the plentiful availability of jobs is encouraging people to enter the labour market.

However, the monthly numbers suggest a much less rosy outlook: employment is up only slightly by 7,000, and unemployment increased in the month by 4,000. The level of vacancies was also flat suggesting a stalling in labour demand. Also, the percentages of people working involuntarily on a part-time or temporary basis because they could not find a full-time or permanent job respectively both edged up in today's figures.

While one swallow does not a summer make, these are potentially signs of a slowing labour market in the face of recent economic weakness and continued Brexit uncertainty. We will watch the coming months' numbers with interest to see if today's numbers are confirmed as the start of a new trend or merely a blip.’

Employment is up by 179,000 between September to November 2018 and December 2018 to February 2019. In the last 12 months employment rose by 457,000.

Unemployment fell by 27,000 between September to November 2018 and December 2018 to February 2019. and the unemployment rate reduced by 0.1 percentage points to 3.9% in the quarter the lowest level since 1975.

Economic inactivity reduced by 114,000 between September to November 2018 and December 2018 to February 2019. and the inactivity rate is down by 0.3 percentage points to 20.7% in the quarter, the joint lowest recorded.

The national claimant count increased by 28,300. This takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, has risen by 38,600 in the month to March. Therefore, it should not be surprising that figures for local areas will show sharper rises compared to the national picture.

Youth unemployment is showing a quarterly fall. There are still 493,000 unemployed young people, and 345,000 (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 Jobseeker’s Allowance and therefore are not receiving official help with job search is now 43.7% and falling.

A total of 43,000 were counted as in employment while on ‘government employment and training programmes’, where the Office for National Statistics continues to count Work and Health Programme (etc.) participants as ‘in employment’ by default. This number has fallen by 5,000 this quarter. Self-employment has fallen by 23,000 this quarter. The number of employees increased by 179,000 in the quarter. Involuntary part-time employment rose by 67,000 this quarter to 0.9 million, 11.2% 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 1,343,000. It has has risen by 4,000 from the figure published last month. On the basis of later claimant count figures, Learning and Work Institute estimates that unemployment may rise, although changes in the claimant count now look less safe as a guide to changes in jobseeking. The unemployment rate remained unchanged at 3.9%. chart 1
Chart 2: Percentage unemployed not claiming Jobseeker’s Allowance

The proportion of unemployed people not claiming Universal Credit or Jobseeker’s Allowance has fallen to 24.7%; (331,000). chart 2
Chart 3: Youth long-term unemployment (six months and over, 18-24)

Youth long-term unemployment (which can include students) has fallen by 9,000 from last month’s figure and is now 129,000.

The youth long-term Jobseeker’s Allowance count (but not UC) remains far behind, at 15,500. 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 400 this month. chart 3
Chart 4: Adult long-term unemployment (12 months and over, 25+)

Adult long-term unemployment on the survey measure is now 277,000. The Jobseeker’s Allowance measure is 138,200. Adult unemployed are now increasingly claiming Universal Credit, so these JSA claimants are those with work records giving rights to contribution-related JSA, or long term unemployed with family dependants.

chart 4
Chart 5: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 10.3% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 3.0%. For those aged 50 and over it is 2.7%. The quarterly change is within rounding errors for all three age-groups. chart 5
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 (916,000) has fallen in the past quarter by 32,000, or 3.4%. The fall was among the inactive, with the number of unemployed young people not in full-time education or training rising to 345,000. chart 6
Chart 7: Youth unemployment

The number of unemployed young people has fallen by 7,000 since last month’s figures, to 493,000.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants rose last month by 4,700, to 201,320. There are 151,000 unemployed young people who are not in education, and do not claim Universal Credit or Jobseeker’s Allowance, 43.7% of all unemployed young people who are not students. chart 7
Chart 8: Jobseeker’s Allowance and Universal Credit claimant count

The ONS headline Jobseeker’s Allowance and Universal Credit claimant count is up by 28,310 in March, taking the total to 1,066,170. ONS' claimant count before seasonal adjustment rose by 38,647 to 1,102,320. This change is directly comparable to the local level claimant count changes published today.

Learning and Work Institute's seasonally adjusted estimate is up by 26,820 to 1,069,450. At this time of year, claimant numbers normally increase for seasonal reasons, before later falling back. chart 8
Chart 9: Jobseeker’s Allowance – new claims and leavers

The number of new Jobseeker’s Allowance claims fell by 7,800 this month, to 15,900. Meanwhile the number of leavers also fell, by 20,700, to 35,300. 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 9
Chart 10: Jobseeker’s Allowance – claimants staying through each three-month threshold (seasonally adjusted)

These measures show a decrease in off-flow for claimants at all lengths of unemployment, except the longest term.

The proportion staying beyond three months has risen to 49.2%, a historically high figure. These are Jobseeker's Allowance statistics only, as Universal Credit statistics do not yet permit this type of analysis. chart 11
Chart 11: Jobseeker’s Allowance – proportion of starters in month becoming longer-term unemployed

The proportion of starters becoming 12-month claimants is now 13.1%. This is likely to fall over the next few months as the proportion of starters becoming 9-month claimants has fallen by 0.8 percentage points over the last three months.

These figures are based on those in Chart 10, but show the patterns of the same people passing through successive quarterly thresholds. chart 12
Chart 12: Vacancies – whole economy survey

Vacancies (in the Office for National Statistics survey of the whole economy) fell slightly this month, to 852,000. As the number of vacancies is quite volatile, and frequently revised, the Office for National Statistics uses a three-month average. chart 13
Chart 13: 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 14
Chart 14: UK employment

Employment is up by 7,000 on the figure published last month, to 32,721,000. chart 15
Chart 15: Employment rate in the UK

The employment rate rose by 0.4 percentage points over the quarter, to 76.1%. chart 16
Chart 16: Claimants for inactive benefits and the economically inactive – inactivity benefits

The number of people inactive owing to long-term sickness remains 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 17
Chart 17: Claimants for inactive benefits and the economically inactive – lone parents

The survey figures (showing those looking after family) are trending down while benefit measures are more volatile.

Income Support estimates have decreased, and those for JSA 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 JSA (the orange dots) and survey figures for all those who are economically inactive looking after family (including couple families). chart 18
Chart 18: Employment rate quarterly change in regions – December 2018 to February 2019

This quarter, 9 regions showed a rise in the employment rate, led by Northern Ireland and the West Midlands. The employment rate fell in 3 regions, led by the North West and Wales. chart 19
Chart 19: Unemployment rate quarterly change in regions – December 2018 to February 2019

7 regions showed an improvement in the unemployment rate this quarter. 5 showed a worsening. The rises were led by Wales and the West Midlands. chart 20
Chart 20: Inactivity rate quarterly change in regions – December 2018 to February 2019

Overall, there was a 0.3 percentage point fall in the inactivity rate. 4 regions showed rises in inactivity, led by the North East and London. chart 21

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