Making learning and work count

Labour market LIVE from Learning and Work Institute
15 June 2021

  • Unemployment is 1,613,000, down by 10,000 from last month’s published figure (quarterly headline decreased by 90,000) and the unemployment rate 4.7%, the same as last month and decreased by 0.3 percentage points on last quarter.
  • The ONS figure for claimant unemployed is 2,495,700, decreased by 92,600 on last month, and the claimant rate is 6.2%.
  • The number of workless young people (not in employment, full-time education or training) is 918,000, reduced by 37,000 on the quarter, representing 13.4% of the youth population (has fallen by 1.2 percentage points).
  • Youth unemployment (including students) is 529,000, reduced by 52,000 on the quarter.
  • Vacancies in Mar-May 2021 (in the ONS official series) to 758,000 after recovering strongly from the low point of 341,000 in April to June 2020.
  • There are now 2.4 unemployed people per vacancy.
  • The employment rate is 75.2% (the same as last month’s published figure and up by 0.2 percentage points in the preferred quarterly measure).

Learning and Work Institute comment

The labour market figures published on 15 June clearly indicate that the labour market is recovering with strong employment growth, surging vacancy levels and redundancies falling to pre-pandemic levels.

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

‘Employment in the three months to February to April 2021 increased by over 100,000, the second consecutive quarterly increase. In line with this, the latest workforce jobs numbers for March 2021 showed a quarterly increase of 151,000. The monthly HMRC payroll statistics indicate that this expansion continued into May with payroll numbers up by 197,000 in the month. Between March and May payroll numbers have increased by 331,000. Additionally, in April alone total hours worked increased by 8 percent.

A range of vacancy numbers also point to the strong likelihood of this rise in employment continuing. The headline three-month vacancy numbers for March to May at 758,000 were up by 96,000 in the month and were close to pre-pandemic levels. The single month seasonally unadjusted vacancy numbers at 881,000 have increased by over a half since February and are now above pre-pandemic levels. Similarly, the latest Adzuna on-line job adverts numbers were 29 percent above pre-pandemic levels in early June. The seasonally adjusted Indeed job postings data for early June were 5 percent above their early February 2020 pre-pandemic levels.

With this rise in employment, unemployment in February to April 2021 fell by 90,000 compared to the previous three months. This follows a similar large quarterly fall reported last month. The claimant count fell substantially by 93,000 in May, the largest monthly fall since 1996 and suggesting official unemployment will continue to fall in the immediate future. Consistent with this picture, redundancy numbers have fallen dramatically since the Autumn of 2020 and are now back at pre-pandemic levels.

Working age economic inactivity, however, again rose in February to April 2021 which was surprising as an improving labour market might have been expected to encourage people to start looking for work again. However, more positively this rise in inactivity was only small.

While the above figures are both positive and welcome, not all is rosy in the garden. In line with the experience of past recessions there have been rises in the percentages of people who are working part-time involuntarily because they cannot find a full-time job and those who are working involuntarily on a temporary contract because they cannot find a permanent job. Around one in eight part-time workers are working involuntarily in this sense compared to one in ten pre-pandemic and the equivalent figure for temporary working are now one in three compared to a quarter pre-pandemic.

The extension of restrictions on economic activity past 21 June is likely to slow down continuing recovery in the labour market. Furthermore, unemployment can be expected to rise as the generosity of the Furlough scheme becomes less generous from July and is stopped at the end of September. Likely to be more long lasting is the rise in long-term unemployment which is up by around a half in the last year. The lesson of the past is that if long term-unemployment becomes entrenched then it can be very difficult to get down with consequent large economic and social costs. Ongoing active government policy action will be required to support people, especially the long-term unemployed, back into work.’

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

"These figures include reopening in February to April 2021, and the annual changes include the first effects of the pandemic on the labour market in February to April 2020. The pandemic has affected the surveys reported in these statistics, and we expect that next month's statistics will include some substantial revisions as ONS make more use of the HMRC employee information from tax records to calibrate the surveys."

Employment has risen by 113,000 between November 2020 to January 2021 and February to April 2021. In the last 12 months employment fell by 353,000.

Unemployment fell by 90,000 between November 2020 to January 2021 and February to April 2021. and the unemployment rate is down by 0.3 percentage points to 4.7% in the quarter.

Economic inactivity is up by 17,000 between November 2020 to January 2021 and February to April 2021. and the inactivity rate is up by 0.3 percentage points over the year.

Youth unemployment fell by 52,000. There are 529,000 unemployed young people, and 356,000 (5.2% of the youth population) who are unemployed and not in full-time education.

Self-employment fell by 513,000 this year. The number of employees rose by 207,000 over the year. Involuntary part-time employment has risen by 10,000 this quarter to 1.0 million, 13.1% of all part-time workers. The number of involuntary temporary workers is 506,0000, 32.2% of all temporary workers.

Chart 1: UK unemployment (ILO)

The latest unemployment rate has fallen by 0.3 percentage points in the quarter to 4.7%. The experimental weekly figures are down to 4.2% in the last week of April. chart 1
Chart 2: The claimant count and UK unemployment compared

The number of unemployed people who are claiming unemployment-related benefits is now 883,000 higher than the number of unemployed in the official measure. chart 2
Chart 3: Youth unemployment

The number of unemployed young people decreased by 7,000 since last month’s figures, to 529,000.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants has fallen by last month by 22,400, to 477,900. chart 7
Chart 4: 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 (918,000) decreased by 86,000 in the last quarter , or 8.6%. The fall was fairly evenly balanced between the unemployed and the inactive. chart 6
Chart 5: Youth long-term unemployment (six months and over, 18-24)

Youth long-term unemployment (which can include students) has risen by 63,000 over the last year and is now 215,000.

chart 3
Chart 6: Adult long-term unemployment (12 months and over, 25+)

Adult long-term unemployment has risen by 89,000 over the last year and is now 299,000. Those who lost their jobs with the first lockdown are now starting to appear in these February to April figures, and more will now have passed the 12-month threshold. The fall in long-term unemployment numbers in the first lockdown period of 2020 (April to June 2020) could be due to long-term unemployed people stopping looking for work at that time. Later, they then resumed looking for work and may have counted their unemployment from when they lost their job, missing out the lockdown period, if so they would have come back into the figures.

chart 4
Chart 7: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 11.7% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 3.6%. For those aged 50 and over it is 3.6%. The quarterly change is down 1.5 for 18 to 24 year olds, down 0.1 for 25 to 49 year olds, and down 0.3 for the over-50s. chart 5

Chart 8: Unemployment rate changes by age (counting February 2020 as 100)

The 18 to 24 year old unemployment rate (including students) is 1.2 percentage points higher than in February 2020. This is much closer to the changes for other age-groups than had been the case in recent months. The change for those aged 25 to 34 is 0.9. The change for those aged 35 to 49 is 0.8. The change for those aged 50 to 64 is 0.7 The change for those aged over 65 is 0.1 chart 5
Chart 9: Vacancies – whole economy survey

Headline vacancies this month rose by 96,000 to 758,000. The ONS' experimental single-month vacancy figures has risen by 312,000 in the last quarter. The headline ONS vacancy figure is both seasonally adjusted and a three-month average. The chart shows both series. chart 13
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.

To compare the extent to which vacancies have rebounded, the chart compares changes over two years, between the latest figures (May 2021) and May 2019. The numbers are thousands of vacancies, under each number, and on the right, the annual change in thousands of vacancies. chart 13
Chart 11: Unemployed people per vacancy

There are 2.4 unemployed people per vacancy. This has fallen back as the number of vacancies has risen and unemployment has fallen. chart 14
Chart 13: Online vacancies to early March from Adzuna

Job vacancies are 129% of the February 2020 level. This is now the highest in this series (starting in February 2018). All regions are above the February 2020 level. Only London, the South East and Northern Ireland are not at post-2018 maxima. chart 14
Chart 14: UK employment

Employment is up by 11,000 on the figure published last month, to 32,487,000. The chart shows both the official figures and the experimental weekly figures. The trend is likely to be upwards, as shown by the experimental weekly figures. chart 15
Chart 15: Employment rate in the UK

The employment rate is up by 0.2 percentage points over the quarter, to 75.2%. The chart shows both the official figures and the experimental weekly figures. The trend is likely to be upwards, as is shown by the weekly figures (the latest one is 75.6, rounded up to 76 in Chart 15 below). chart 16
Chart 16: Economic inactivity – the long-term sick or disabled

The numbers of people who are economically inactive, that is, not working and not currently looking for work, who are long-term sick or disabled has been trending down over the last few months, after a longer rise. chart 17
Chart 17: Economic inactivity – people looking after family

The survey figures (showing those looking after family) and not doing paid work or looking for paid work have flattened out in the last few months. chart 18
Chart 18: 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 18
Chart 19: Employment rate quarterly change in regions – February to April 2021

In the latest figures, 4 regions showed a rise in the employment rate on last year, led by Scotland and Yorkshire and the Humber. The employment rate fell in 8 regions, with the largest falls in the East Midlands, North West and South West. chart 19
Chart 20: Unemployment rate quarterly change in regions – February to April 2021

This year, 11 regions showed a rise in the unemployment rate, led by London, Wales and the East Midlands. The unemployment rate fell in one region, Scotland. chart 20
Chart 21: Inactivity rate quarterly change in regions – February to April 2021

This year, 7 regions showed a rise in the inactivity rate, led by the North West and the South West. The inacivity rate fell in 4 regions, led by Wales, the West Midlands and Yorkshire and the Humber. chart 21

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