• Unemployment is 1,372,000, has fallen by 8,000 from last month’s published figure, but is up over the quarter by 8,000, and the unemployment rate 4.0%, fell by 0.1 percentage points on last month and was unchanged on last quarter.
• The ONS figure for claimant unemployed is 1,016,300. It rose by 20,800 on last month, and the claimant rate is 2.8%.
• The number of workless young people (not in employment, full-time education or training) is 955,000, which is down by 6,000 on the quarter, representing 13.7% of the youth population (no change).
• Youth unemployment (including students) is 511,000, and is up by 47,000 on the quarter.
• There are 1.6 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise if unemployment follows the claimant count up.
• The employment rate is 75.8% (up 0.1 percentage points on last month’s published figure and also up by 0.2 percentage points in the preferred quarterly measure).

Learning and Work Institute comment:

The labour market figures published on 22 January are another set of positive numbers following on from last month's figures. However, claimant unemployment has continued to rise and was above a million in December 2018 as we had anticipated last month.

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

‘Today is ground hog day for the labour market numbers. The pattern of the numbers is precisely the same as those announced last month: employment was again up substantially in the quarter (September to November 2018 compared to June to August 2018), economic inactivity down substantially again amongst people of working age and unemployment up slightly. The proportion of people working part-time because they could not find a full-time job also dipped again and is at its lowest level for nearly 10 years. Annual wage growth stayed at 3.3% in November, and after accounting for inflation, real wage growth was 1.1%. This is all good news and the rise in employment and fall in inactivity, in particular, suggest that people are re-entering the labour market and moving into work.

These numbers are surprising given the economic background, especially the ongoing uncertainty around Brexit with the risk of the UK crashing out of the EU very shortly with no deal still very much a possibility. Whatever our future holds some comfort can be taken from the fact that the labour market, in which people will face the immediate future, is remarkably robust.’

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

‘The claimant count has risen over 1 million this month, as we have been predicting for several months. It has risen by 254,000, or 33%, since February 2016. Unfortunately the response of DWP has been to create a new version of the claimant count, that does not show the fall to 762,200 in 2016, and showing little change since then.

The new DWP series aims to estimate a time series for an 'Universal Credit world'. This includes large numbers of 'additionals' who were not subject to sanction if they didn't look for work, and would be under Universal Credit. The 'additionals' include:

• People who are not in work but previously claimed Housing Benefit only, and not Jobseeker's Allowance.
• People whose household previously claimed Child Tax Credit from HM Revenue & Customs (HMRC), but are not themselves earning more than the Universal Credit administrative earnings threshold; and nor do they have responsibility as the main carer for their child.
• People who are the partner of a claimant of Employment and Support Allowance or Income Support, but who do not themselves have caring responsibilities, a disability or a limitation on their ability to work.

Those are DWP's descriptions. They more plainly may be described as:

• People in working families who claimed in-work Housing Benefit but were not in work themselves
• Parents who are low-paid but aren't the main carer
• Carers where the person cared for has not proved beyond reasonable doubt to DWP (through the PIP benefit test) that personal care is required.

None of these groups obviously belong in a time series measuring unemployment or related issues.

It is notable that DWP's 'additionals' have shown a trend fall over the entire time they have estimated the numbers, from over 700,000 in January 2013, down to 538,000 when the ONS claimant count reached its' lowest point in February 2016, down to 366,000 in November 2018. DWP's overall number started at 2.2 million in 2013, falling to 1.2 million in 2016 and remaining at that level since then.

It is important to maintain high levels of trust in official statistics. The independent Office for National Statistics has a claimant count that we report - which has 'experimental' status due to the change to Universal Credit. A consistent time series approximating international definitions of unemployment using benefit data would be extremely helpful. We have some concerns that the addition of this DWP series may not be that series.’

Employment rose by 141,000 between June to August 2018 and September to November 2018. In the last 12 months employment rose by 328,000.

Unemployment is up by 8,000 between June to August 2018 and September to November 2018. The unemployment rate showed no change at 4.0% in the quarter the lowest level since 1975.

Economic inactivity reduced by 100,000 between June to August 2018 and September to November 2018. The inactivity rate fell by 0.2 percentage points to 21.0% in the quarter.

The national claimant count rose by 20,800. This takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, rose by 19,700 in the month to December. Therefore, it should not be surprising that figures for local areas will show smaller rises compared to the national picture.

With these statistics, DWP has published an alternative claimant count measure (to the ONS one). This shows smaller rises, as it includes, for preceding periods, estimates of those who were not subject to the Universal Credit out of work regime, but would have been if Universal Credit had been fully rolled out on schedule in 2013.

The proportion of people leaving the claimant count (or the ‘leavers rate’) has fallen. At 12.4%, it is now well below the level in early 2015 of 17%. Jobseeker’s Allowance off-flow rates for JSA claimants fell.

Youth unemployment is showing a quarterly rise. There are 511,000 unemployed young people, and 334,000 (4.8% 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 44.7%.

A total of 49,000 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 increased by 4,000 this quarter. Self-employment rose by 93,000 this quarter, to just 1,000 fewer than the all-time record. The number of employees is up by 58,000 in the quarter. Involuntary part-time employment reduced by 62,000 this quarter to 0.9 million, 10.5% of all part-time workers.The proportion remains much higher than the 7.4% in 2004.

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 Paul Bivand
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