• Unemployment is 1,448,000, down by 62,000 from last month’s published figure (quarterly headline is down by 152,000). The unemployment rate is 4.3%, down by 0.2 percentage points on last month and has fallen by 0.5 percentage points on last quarter.
• The ONS figure for claimant unemployed is 2,063,100, down by 14,900 on last month, and the claimant rate is 5.1%.
• The number of workless young people (not in employment, full-time education or training) is 881,000, up by 27,000 on the quarter, representing 13.0% of the youth population and has risen by 0.4 percentage points.
• Youth unemployment (including students) is 475,000, down by 54,000 on the quarter.
• Vacancies in Aug-Oct 2021 rose 64,000 (in the ONS official series) to 1,172,000 after recovering strongly from the low point of 340,000 in April to June 2020. Single-month estimates for October rose to 1,298,000.
• There are now 1.3 unemployed people per vacancy.
• The employment rate is 75.4% and (has risen by 0.1 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 16 November indicate a continuing strong improvement in the labour market. Today's numbers largely relate to periods before the Coronavirus Job Retention Scheme finished at the end of September.

Duncan Melville, Chief Economist at Learning and Work Institute, commented:

‘The labour market continues to recover from the impacts of the pandemic, which is easing but is not yet over. Today’s headline Labour Force Survey (LFS) numbers show an increase in employment of 247,000 in the three months to July to September 2021 - a very large quarterly increase by historic standards. The timelier HMRC employee payroll numbers show an increase of 160,000 in the month to October, the first month since the Coronavirus Job Retention Scheme finished. This compares with an average monthly increase of just 31,000 in the five years prior to the pandemic.

There are good prospects for continuing employment growth. Vacancy levels have continued to grow strongly to close to 1.2 million in August to October. Data on job adverts from Adzuna and job postings from Indeed indicate that vacancy levels continued to increase into early November. In part these very high vacancy levels reflect employers’ difficulties in finding staff across a range of sectors and occupations. These labour shortages across a range of sectors and occupations are already thought to be a factor behind the lower than expected numbers for UK economic growth in July to September which the Office for National Statistics (ONS) released last week.

Given strongly rising employment it is not a surprise that unemployment has fallen substantially: down by 152,000. This quarterly fall in unemployment was the largest in nearly seven and a half years. More worryingly, inactivity amongst people of working age rose very slightly in the quarter. Over the course of the pandemic rising worklessness has been reflected much more in higher inactivity than higher unemployment.

There are still close to 2.1 million people on the claimant count, more than 800,000 above pre-pandemic levels and around 600,000 above the official LFS measure of unemployment, having been below this measure pre-pandemic. This may indicate that substantial numbers of people are receiving unemployment-related benefits, but who are not either looking for work or available to start work. This raises concerns about the effectiveness with which employment support is assisting people to enter work.

Most of the data released today pertain to dates prior to end of the Coronavirus Job Retention Scheme (CJRS) at the end of September. There were around 1.1m people who were still furloughed when the CJRS ended. The questions are how many of these people have returned to work in their existing jobs from which they were furloughed, how many have found new jobs, how many have become unemployed, and how many have left the labour market (economic inactivity). The ONS’ Business Insights and Conditions Survey (BICS) found that in late October 2021, 87 percent of formerly furloughed employees had returned to work. Similarly, a survey by the Resolution Foundation suggested that 88 percent of employees who were furloughed in September were working October, with 3.4 percent unemployed and 8.5 per cent having left the labour market and become economically inactive. Applying these percentages to the 1.1 million who were furloughed at the end of September would translate into a rise in unemployment of around just 39,000, alongside a rather larger increase in inactivity of 97,000 in the first half of October. Generally, the rise in worklessness since the start of the pandemic has been reflected more in increased inactivity (up 364,000) than higher unemployment (up 84,000).

This also suggests that around one million formerly furloughed workers were in employment in the first half of October. The number of employees who left payrolls in October (offset by large inflows onto payrolls) was about 100,000 higher than the figures seen in recent months which suggests that some formerly furloughed workers did not reattach to their ‘old’ jobs but instead moved into new jobs in October.

The available numbers for October also suggest that the end of the CJRS did not see a substantial negative impact on the labour market. The claimant count continued to fall, albeit by less than has been seen in recent months, and the HMRC numbers for payrolled employees rose by 160,000 - a similar increase to those seen in previous months. Thus, these numbers show little sign of a significant adverse impact from the ending of the CJRS.

Even so there are many people out of work who could and would like to work. Given what has happened to inactivity and unemployment since the start of the pandemic policy needs to focus more widely than just on unemployment, and must also address the rise in economic inactivity. Those who have left the labour market need support to encourage them to return to looking for work through policies which are effective at helping people into work. ’

Paul Bivand, Associate Director for Statistics and Analysis at Learning and Work Institute, said:

"The claimant count remains well above the official survey measure of unemployment, and fell less this month than in previous months. The figures include the first two weeks after the end of the furlough scheme. Separate figures from the Department for Work and Pensions show no increase in new Universal Credit claims in the two weeks after the end of the furlough scheme. It remains possible that DWP had recorded claims from people who later received furlough, but then froze the claims. We will see later if benefit spending goes up as DWP pays people income rather than furlough."

Employment has risen by 247,000 between April to June 2021 and July to September 2021. In the last 12 months employment is up by 173,000.

Unemployment is down by 152,000 between April to June 2021 and July to September 2021. and the unemployment rate reduced by 0.5 percentage points to 4.3% in the quarter.

Economic inactivity rose by 6,000 between April to June 2021 and July to September 2021. and the inactivity rate was stable at 21.1% in the quarter.

The national claimant count fell by 14,900.

Youth unemployment has fallen by 54,000. There are 475,000 unemployed young people, and 300,000 (4.4% of the youth population) who are unemployed and not in full-time education.

Self-employment is down by 751,000 since the pandemic started. The number of employees rose by 255,000 over the same period. Involuntary part-time employment is up by 113,00 since the pandemic started to 1.0 million, 12.6% of all part-time workers. Involuntary temporary employment is up 119,000 since the pandemic started to 29.9% of all temporary workers.

This newsletter is produced by Learning and Work Institute and keeps readers up to date on a wide range of learning and work issues.

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