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Labour market LIVE from Learning and Work Institute
16 July 2019


  • Unemployment is 1,292,000, down by 12,000 from last month’s published figure (quarterly headline also down by 51,000) and the unemployment rate was 3.8%, no change on last month and down by 0.1 percentage points on last quarter.
  • The ONS figure for claimant unemployed is 1,142,100, up by 38,000 on last month, and the claimant rate is 3.2%.
  • The number of workless young people (not in employment, full-time education or training) is 949,000, has risen by 33,000 on the quarter, representing 13.7% of the youth population (up by 0.5 percentage points).
  • Youth unemployment (including students) is 493,000, no change on the quarter.
  • There are 1.5 unemployed people per vacancy.
  • The employment rate is 76.0% (down by 0.1 percentage points on last month’s published figure and also down by 0.1 percentage points in the preferred quarterly measure).

Learning and Work Institute comment

The labour market figures published on 16 July indicate a tight labour market but one that is clearly slowing down.

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

"There’s a sense of deja vu in today’s numbers, just as in June, they show in the three months from March to May 2019, a modest rise in employment, a small decline in unemployment, and a rise in economic inactivity as workers leave the labour market. Worryingly, this quarterly rise in economic inactivity has increased from 32,000 for February to April 2019 to 83,000 for March to May 2019. This supports our contention that the labour market continues to slow down and lose momentum. The continuing fall in vacancy levels in the April to June quarter, which have now been falling for five consecutive months, also point to a slowing labour market.

The claimant count numbers are up substantially again, by 38,000 this month and by 254,000 in the last year, and by 343,000 in the last two years. In part, this will reflect a weakening labour market, but we believe that policy has also played a role; that the activation regime for unemployed people is now operating less effectively than it has in the past due to various impacts from the roll out of Universal Credit.

The tightness of the labour market (even if it is losing momentum) appears to be feeding through to wages. The three months to May 2019, saw wages (excluding bonuses) grow by 3.6%, the fast growth since the summer of 2008, whilst real wages after accounting for inflation grew by 1.7%, the fastest increase since October 2015.

One bright spot in today’s numbers is the position of Northern Ireland. The employment rate in Northern Ireland has reached a record high of 71.7% and has increased strongly in the last year by 1.7 percentage points, inactivity has fallen substantially in the last year, and the unemployment rate is just 3.2%. It is of course highly questionable whether such improvements would survive the economic disruption of a No Deal Brexit and the imposition of a hard border between Northern Ireland and the Republic of Ireland."

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

"In this briefing, we have dropped most of the analysis of Jobseeker’s Allowance as new claims for JSA are now only for 'new-style' contribution-related benefit. This makes comparisons difficult. We have so far kept in the briefing figures for long-term JSA unemployed as the Universal Credit figures do not yet cover durations within each work conditionality group. These figures remain useful for over-25s, but are less so for under 25s."

Employment has risen by 28,000 between December 2018 to February 2019 and March to May 2019. In the last 12 months employment is up by 354,000.

Unemployment is down by 51,000 between December 2018 to February 2019 and March to May 2019, and the unemployment rate reduced by 0.1 percentage points to 3.8% in the quarter, the lowest level since 1974.

Economic inactivity has risen by 83,000 between December 2018 to February 2019 and March to May 2019. The inactivity rate is up by 0.2 percentage points to 20.9% in the quarter.

The national claimant count has risen by 38,000. This takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, increased by 30,500 in the month to June. Therefore, it should not be surprising that figures for local areas will show rises as well. These rises are partly driven by Universal Credit counting more people as required to look for work to get benefit support.

Youth unemployment is showing no change on the quarter. There are still 493,000 unemployed young people, and 349,000 (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 Universal Credit (or Jobseeker’s Allowance) and therefore are not receiving official help with job search, is now 41.1%.

A total of 40,000 were counted as in employment while on ‘government employment and training programmes’, where the Office for National Statistics continues to count employment programme (etc.) participants as ‘in employment’ by default. This number reduced by 3,000 this quarter. Self-employment is up by 123,000 this quarter. The number of employees reduced by 85,000 in the quarter. Involuntary part-time employment has fallen by 19,000 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 1,292,000. It has decreased by 12,000 from the figure published last month. The unemployment rate was 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 has fallen to 16.4%; (212,000). 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 11,000 from last month’s figure and is now 137,000.

The youth long-term Jobseeker’s Allowance count (but not UC) remains far behind, at 13,300. The count fell by 1,000 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 263,000. The Jobseeker’s Allowance measure is 141,700.

chart 4
Chart 5: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 10.7% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 2.8%. For those aged 50 and over it is 2.6%. The quarterly change is up 0.4 for 18 to 24 year olds, down 0.2 for 25 to 49 year olds, and down 0.1 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 (949,000) has risen in the past quarter by 33,000, or 3.6%. The rise was largely among the inactive, with the number of unemployed young people not in full-time education or training also rising, but at a lower rate. chart 6
Chart 7: Youth unemployment

The number of unemployed young people has risen by 12,000 since last month’s figures, to 493,000. However, there is no change on the quarter.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants rose last month by 6,000, to 217,100. There are 143,000 unemployed young people who are not in education, and do not claim Jobseeker’s Allowance, 41.1% 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 has risen by 38,000 in June, taking the total to 1,142,100. ONS' claimant count before seasonal adjustment is up by 30,500 to 1,145,000. This change is directly comparable to the local level claimant count changes also published today.

Learning and Work Institute’s seasonally adjusted estimate has risen by 37,600 to 1,146,000 chart 8
Chart 9: Vacancies – whole economy survey

Vacancies (in the Office for National Statistics survey of the whole economy) fell again this month, to 827,000. 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 1.5 unemployed people per vacancy. chart 14
Chart 11: UK employment

Employment increased by 3,000 on the figure published last month, to 32,749,000. chart 15
Chart 12: Employment rate in the UK

The employment rate decreased by 0.1 percentage points over the quarter, to 76.0%. chart 16
Chart 13: Claimants for inactive benefits and the economically inactive – inactivity benefits

The number of people inactive owing to long-term sickness remains broadly flat, while the latest benefit figure shows falls. Some of the falls are the result of people claiming Universal Credit when they do not have sufficient National Insurance contributions to claim Employment and Support Allowance.

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. chart
17
Chart 14: Claimants for inactive benefits and the economically inactive – lone parents

The survey figures (showing those looking after family) are also broadly flat while benefit measures fell.

The benefit figures are also affected by Universal Credit rollout, where new claims are now Universal Credit rather than Income Support.

This chart shows claimants of Income Support as lone parents, plus lone parents claiming Jobseeker’s Allowance (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 – March to May 2019

This quarter, 6 regions showed a rise in the employment rate, led by the South East and Northern Ireland. The employment rate fell in 6 regions, led by the North West and Yorkshire and The Humber. chart 19
Chart 16: Unemployment rate quarterly change in regions – March to May 2019

8 regions showed an improvement in the unemployment rate this quarter. 4 showed a worsening. The rises were led by the North West and Northern Ireland. chart 20
Chart 17: Inactivity rate quarterly change in regions – March to May 2019

Overall, there was a 0.2 percentage point rise in the inactivity rate. 6 regions showed rises in inactivity, led by the Yorkshire and The Humber and the West Midlands. chart 21

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