Making learning and work count

Labour market LIVE from Learning and Work Institute
18 February 2020

  • Unemployment is 1,290,000, down by 17,000 from last month’s published figure (quarterly headline reduced by 16,000) and the unemployment rate 3.8%, showed no change on last month and also no change on last quarter.
  • The ONS figure for claimant unemployed is 1,234,500, and rose by 5,500 on last month, and the claimant rate is 3.4%.
  • The number of workless young people (not in employment, full-time education or training) is 962,000, fell by 36,000 on the quarter, representing 14.0% of the youth population (has fallen by 0.5 percentage points).
  • Youth unemployment (including students) is 481,000, reduced by 19,000 on the quarter.
  • There are 1.6 unemployed people per vacancy.
  • The employment rate is 76.5% (is up by 0.2 percentage points on last month’s published figure and has risen by 0.5 percentage points in the preferred quarterly measure).

Learning and Work Institute comment:

The latest labour market figures published on 18 February are another set of very positive numbers with a large rise in employment in the quarter.

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

‘The quarterly numbers for employment for October to December 2019 released today are again very positive, up by 180,000 and rather difficult to explain given that economic growth remains weak - last week the ONS reported that output did not grow in the last three months of 2019. Survey indicators suggest that Brexit related, and political uncertainty has receded following the decisive results of the December General Election. However, uncertainty remains high driven by concerns over the potential for a No Deal outcome to the UK-EU trade talks this year (or only a minimalist thin trade agreement).

The large rise in employment was reflected in a large fall in economic inactivity of more than 100,000 in the quarter as people re-enter the labour market, and only "Lonely this Christmas" in Christmas 1974. With unemployment at such levels it is inevitable that increases in employment will largely come from people who were previously economically inactive. Another sign of labour market strength is that the level of vacancies increased for the second month running following nearly a year of trending down. Despite the tight labour market, wage growth has moderated with increases down to 3.2 percent and 1.8 percent in real terms after taking account of inflation. Muted inflationary pressures mean that the Bank of England is likely to leave interest rates on hold for now.

While today's number are very welcome, the outlook for the rest of 2020 remains highly uncertain. Our expectation is that weak economic growth must at some point feed through into the labour market. In addition, Brexit remains far from a done deal with the prospect of No Deal or a very thin "Low Deal" covering few of the outstanding economic items very much a possibility.’

Paul Bivand, associate director for statistics and analysis at Learning and Work Institute said:

"In early 2020, we are planning to revise these briefings. The move to Universal Credit has meant that the level and depth of information on benefit claimants has reduced dramatically, and has meant that some of our regular analysis has become more difficult to interpret. Comments and suggestions for coverage are welcome. Benefits statistics in particular are quarterly in large part (some less frequent) so these sections are likely to move to quarterly analysis."

Employment increased by 180,000 between July to September 2019 and October to December 2019. In the last 12 months employment increased by 336,000.

Unemployment has fallen by 16,000 between July to September 2019 and October to December 2019. and the unemployment rate was stable at 3.8% in the quarter the lowest level since 1975.

Economic inactivity reduced by 138,000 between July to September 2019 and October to December 2019. The inactivity rate decreased by 0.3 percentage points to 20.5% in the quarter, the lowest since records started in 1971.

The national claimant count rose by 5,500. This takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, rose by 22,300 in the month to January. Therefore, it should not be surprising that figures for local areas will show large rises.

Youth unemployment is showing a quarterly fall. There are still 481,000 unemployed young people and 339,000 (4.9% 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 31.3%.

A total of 55,000 were counted as in employment while on ‘government employment and training programmes’, where the Office for National Statistics continues to count employment programme participants as ‘in employment’ by default. This number decreased by 2,000 this quarter. Self-employment increased by 71,000 this quarter. The number of employees rose by 106,000 in the quarter. Involuntary part-time employment is up by 54,000 this quarter to 0.9 million, 10.9% 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 1,290,000. It has has fallen by 17,000 from the figure published last month. The unemployment rate remained unchanged at 3.8%. chart 1
Chart 2: Percentage unemployed not claiming Jobseeker’s Allowance

The proportion of unemployed people not claiming Jobseeker’s Allowance is 4.9%; (63,000). chart 2
Chart 3: Youth long-term unemployment (six months and over, 18-24)

Youth long-term unemployment (which can include students) has risen by 1,000 from last month’s figure and is now 127,000.

The youth long-term Jobseeker’s Allowance count (but not UC) remains far behind, at 6,700. chart 3
Chart 4: Adult long-term unemployment (12 months and over, 25+)

Adult long-term unemployment on the survey measure is now 232,000. The Jobseeker’s Allowance measure is 118,500.

chart 4
Chart 5: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 10.0% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 2.7%. For those aged 50 and over it is 2.6%. The quarterly change is down 0.8 for 18 to 24 year olds, down 0.1 for 25 to 49 year olds, and no change for the over-50s. 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 (962,000) has fallen in the past quarter by 36,000 , or 3.6%. The fall was largely among the inactive, with the number of unemployed young people not in full-time education or training falling at a lower rate. chart 6
Chart 7: Youth unemployment

The number of unemployed young people has fallen by 1,000 since last month’s figures, to 481,000.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants rose last month by 500, to 235,000. There are 106,000 unemployed young people who are not in education, and do not claim Jobseeker’s Allowance, 31.3% 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 increased by 5,500 in January, taking the total to 1,234,500. ONS' claimant count before seasonal adjustment rose by 22,300 to 1,226,300. This change is directly comparable to the local level claimant count changes published today.

L&W's seasonally adjusted estimate rose by 11,000 to 1,241,000. chart 8
Chart 9: Vacancies – whole economy survey

Vacancies (in the Office for National Statistics survey of the whole economy) rose slightly this month, to 810,000. As the number of vacancies is quite volatile, and frequently revised, the Office for National Statistics uses a three-month average. chart 13
Chart 10: Unemployed people per vacancy

There are 1.6 unemployed people per vacancy. chart 14
Chart 11: UK employment

Employment is up by 33,000 on the figure published last month, to 32,934,000. chart 15
Chart 12: Employment rate in the UK

The employment rate rose by 0.4 percentage points over the quarter, to 76.5%. chart 16
Chart 13: Claimants for inactive benefits and the economically inactive – inactivity benefits

The number of people inactive owing to long-term sickness has flattened off, while the benefit figures are showing sharper rises (with data some months behind).

This chart shows claimants of Employment and Support Allowance, and Universal Credit planning for work and those with no work requirements (both out of work) (the orange dots), compared with survey figures for the economically inactive owing to long-term sickness. chart 17
Chart 14: Claimants for inactive benefits and the economically inactive – lone parents

The survey figures (showing those looking after family) continued to fall while benefit measures had fallen earlier.

The benefit figures include lone parents remaining on Income Support as lone parents and Universal Credit claimants in the planning for work group. The latest DWP data does not show any still on Jobseeker's Allowance.

This chart shows claimants of out of work benefits as lone parents (the orange dots) and survey figures for all those who are economically inactive looking after family (including couple families). chart 18
Chart 15: Employment rate quarterly change in regions – October to December 2019

This quarter, eight regions showed a rise in the employment rate, led by the North West and London. The employment rate fell in four regions, led by Yorkshire and the Humber and the South West. chart 19
Chart 16: Unemployment rate quarterly change in regions – October to December 2019

Six regions showed an improvement in the unemployment rate this quarter. Six showed a worsening. The rises were led by the South West and the North East. chart 20
Chart 17: Inactivity rate quarterly change in regions – October to December 2019

Overall, there was a 0.3 percentage point fall in the inactivity rate. Six regions showed rises in inactivity, led by the South West and Yorkshire and the Humber. chart 21

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