Labour Market Analysis | 16 August 2022


	Making learning and work count Labour market LIVE from Learning and Work Institute 16 August 2022 Unemployment has increased by 8,000 from last month's published figure to 1,294,000 (quarterly headline is up by 35,000). The unemployment rate is 3.8%, which showed no change on the last month and increased 0.1 percentage points on the last quarter. The ONS figure for claimant unemployed is 1,531,800, reduced by 10,500 on the last month, and the claimant rate is 3.9%. The number of workless young people (not in employment, full-time education or training) is 887,000, which has decreased by 18,000 on the last quarter, representing 13% of the youth population (an increase of 0.1 percentage points). Youth unemployment (including students) is 337,000, which has decreased by 9,000 on the last quarter. Vacancies in May-Jul 2022 (in the ONS official series) are up to 1,274,000 after recovering strongly from the low point of 329,000 in April to June 2020. There are now 1.0 unemployed people per vacancy. The employment rate is 76.0%, which has (decreased by 0.3 percentage points on last month’s published figure and is down by 0.1 percentage points in the preferred quarterly measure). Learning and Work Institute comment The labour market figures published on 16 August show the cost of living crisis is deepening, with rising inflation meaning we saw the biggest quarterly drop in real regular earnings this century and worse perhaps to come. Employment rose last month, but the employment rate remains below pre-pandemic levels due largely to people leaving the labour market - in addition, unemployment is beginning to increase, which may be the early signal of an economic downturn. Despite this, employers are still hiring at near-record levels, but there are fewer potential workers for employers to recruit, with 527,000 over 50s leaving the labour market since the pandemic started. Stephen Evans, Chief Executive at Learning and Work Institute, said: ‘The pain from the cost of living crisis is deepening with real regular wages continuing to drop at their fastest rate on records dating back to the start of the century, driven by rising inflation. Things will get tougher for households with the sharpest rises in the energy price cap still to come, perhaps to over £4,000 per year. The urgency for further emergency support from the Government grows. The UK also faces a recruitment crunch with employers struggling to fill all their roles, despite 1.9 million people either starting work or changing jobs in the last quarter. This is driven by higher numbers of over 50s and people who are long-term sick leaving the labour market. To tackle these twin challenges we need immediate help and a plan for growth, including better employment support for people who've left the labour market. Otherwise, hardship will grow and our economy will be smaller than it needs to be.’ Helen Gray, Chief Economist at Learning and Work Institute, said: ‘The picture of real wages failing to keep pace with the cost of living is becoming all too familiar. Whilst the consequences of rising prices are alarming for working households, the dire situation is compounded for the unemployed and the involuntarily economically inactive. The increase in economic inactivity amongst those with long-term health problems suggests that more support is needed for this group. It is also concerning to see the rise in the number of those aged 50-64 who are economically inactive, given the risk that any savings for retirement are eroded by the high rate of inflation. Given the high numbers of vacancies relative to those seeking work, it is vital that the government works with employers to ensure that good quality jobs are available to a more diverse range of employees to draw economically inactive people back into the labour market.’ Labour Market Briefing Employment rose by 160,000 between January to March 2022 and April to June 2022. In the last 12 months employment increased by 489,000. Unemployment is up by 35,000 between January to March 2022 and April to June 2022. The unemployment rate is up by 0.1 percentage points to 3.8%. Economic inactivity increased by 26,000 between January to March 2022 and April to June 2022. The inactivity rate was 21.4% over the quarter. The national claimant count has fallen by 10,500. Youth unemployment is down by 9,000. There are 429,000 unemployed young people, and 269,000 (3.9% of the youth population) who are unemployed and not in full-time education. Self-employment has fallen by 31,000 this year. The number of employees has risen by 473,000 over the year. Involuntary part-time employment fell by 68,000 this quarter to 0.8 million, 10.2% of all part-time workers.
	Chart 1: UK unemployment (ILO) The latest unemployment rate is 3.8%.
	Chart 2: The claimant count and UK unemployment compared The number of unemployed people who are claiming unemployment-related benefits is now 238,200 higher than the number of unemployed in the official measure.
	Chart 3: Youth unemployment The number of unemployed young people has fallen by 5,000 since last month’s figures, to 429,000. Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants rose by last month by 2,200, to 247,200.
	Chart 4: Young people not in employment, full-time education or training The number of young people not in employment, full-time education or training (887,000) has risen by 6,000 in the last quarter, or 0.7%. Two-thirds (68%) of young people not in full-time education or employment are economically inactive, rather than unemployed. To be counted as unemployed, people need to be both actively seeking work and available to start. People out of work who do not meet these criteria are counted as economically inactive.
	Chart 5: Youth long-term unemployment (six months and over, 18-24) Youth long-term unemployment (which can include students) has fallen by 16,000 over the last quarter and is now 100,000. Long-term unemployment for young people is normally counted as being unemployed for six months or more. Youth long-term unemployment is now the lowest on record.
	Chart 6: Adult long-term unemployment (12 months and over, 25+) Adult long-term unemployment on the survey measure is now 291,000. There are 51,000 more people aged 25 and over out of work for 12 months or more than before the pandemic (Dec 19-Feb 20), though this is now falling (either due to people finding work or moving into economic inactivity).
	Chart 7: Unemployment rates by age The 18 to 24 year old unemployment rate (including students) is 8.8% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 3%. For those aged 50 and over it is 2.7%. The quarterly change is -0.3 percentage points for 18 to 24 year olds, 0.1 points for 25 to 49 year olds, and 0.2 points for the over-50s.
	Chart 8: Unemployment rate changes by age (counting February 2020 as 100) The 18 to 24 year old unemployment rate (including students) is 1.7 percentage points lower than in February 2020. The change is 0.6 points for those aged 25 to 34. The change is 0.0 points for those aged 35 to 49. The change is -0.2 points for those aged 50 to 64. The change is -0.4 points for those aged over 65. Chart 9: Vacancies – whole economy survey Headline vacancies this month decreased slightly by 21,000 to 1,274,000. The ONS' experimental single-month vacancy figures have fallen by 76,000 in the last quarter. The headline ONS vacancy figure is both seasonally adjusted and a three-month average. The chart shows both series.
	Chart 10: Experimental single month vacancies – whole economy survey The Office for National Statistics experimental single month vacancy estimates include sectoral information. As these are not seasonally adjusted, it is better to look at annual changes. The numbers are thousands of vacancies, at each point in time. On the right is the annual change in thousands of vacancies for each sector.
	Chart 11: Unemployed people per vacancy There are 1.0 unemployed people per vacancy. The number of vacancies is approximately equivalent to the number of ILO unemployed (defined as both seeking work and available to start).
	Chart 12: UK employment Employment is down by 71,000 on the figure published last month, to 32,792,000. The chart shows both the official figures and the experimental monthly figures. Employment levels may have peaked and could continue to trend downwards if forecasts for a recession later this year prove to be correct.
	Chart 13: Employment rate in the UK The employment rate has fallen by 0.1 percentage points over the quarter, to 75.5%. The chart shows both the official figures and the experimental monthly figures.
	Chart 14: Economic inactivity – the long-term sick or disabled The number of people who are economically inactive (that is, not working and not currently looking for work) who are long-term sick or disabled has risen 1.9% in the last 6 months to more than 2.3 million working age people.
	Chart 15: Economic inactivity – people looking after family The survey figures showing those looking after family and not doing paid work or looking for paid work were trending downwards over the past decade but have now been rising steadily since early 2021.
	Chart 16: Economic inactivity – other inactive In the Coronavirus period, people who were not working or looking for work due to Covid were included in this group. The number in this category increased sharply at the time, and has continued at a high level. A very high proportion of this group want to work, and this increased over the period of the pandemic.
	Chart 17: Employment rate three-year change in regions – April to June 2022 This quarter, 4 regions showed a rise in the employment rate, the largest increase being in Yorkshire & The Humber. The employment rate fell in 7 regions, the greatest fall being in the South West. There was no change in Scotland.
	Chart 18: Unemployment rate three-year change in regions – April to June 2022 This quarter, 4 regions showed a rise in the unemployment rate, the largest increase being in the South East. The unemployment rate fell in 7 regions, the greatest fall being in the East Midlands. There was no change in London.
	Chart 19: Inactivity rate three-year change in regions – April to June 2022 This quarter, 8 regions showed a rise in the inactivity rate, the largest increase being in Northern Ireland. The inactivity rate fell in 4 regions, the greatest fall being in Yorkshire & the Humber
This newsletter is produced by Learning and Work Institute and keeps readers up to date on a wide range of learning and work issues. If you have any questions, contact Chris © 2022 Learning and Work Institute. All rights reserved. Click here to unsubscribe