Making learning and work count

Labour market LIVE from Learning and Work Institute
21 January 2020

  • Unemployment is 1,306,000, risen by 26,000 from last month’s published figure (quarterly headline down by 7,000) and the unemployment rate was stable at 3.8%, on last month and fell by 0.1 percentage points on last quarter.
  • The ONS figure for claimant unemployed is 1,241,200, up by 14,900 on last month, and the claimant rate is 3.5%.
  • The number of workless young people (not in employment, full-time education or training) is 981,000, has fallen by 26,000 on the quarter, and is now 14.2% of the youth population (down by 0.4 percentage points).
  • Youth unemployment (including students) is 482,000, and is down by 12,000 on the quarter.
  • There are 1.6 unemployed people per vacancy.
  • The employment rate is 76.3% (up by 0.1 percentage points on last month’s published figure and increased by 0.4 percentage points in the preferred quarterly measure).

Learning and Work Institute comment

The labour market figures published on 21 January are remarkably positive with an unexpectedly large rise in employment in the month and the quarter.

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

‘The monthly and quarterly numbers for employment for August to November 2019 released today are remarkably positive, up by 100,000 and 208,000 respectively, given the current weakness of economic growth and high levels of economic uncertainty associated with Brexit and the nature of our future trading relationship with the EU. Although we anticipated a substantial increase in employment this month due to the large monthly fall in employment announced in October, falling out of the quarterly change this increase in employment is much larger than we had expected. Welcome to the roaring twenties?

Despite the large rise in employment, unemployment only fell modestly in the quarter and actually rose in the month. Instead the large rise in employment was reflected in a large fall in economic inactivity of more than 100,000 in both the month and the quarter as people re-join the labour market. Also welcome is that long term unemployment (12 months plus) has been declining in the last year.

Fitting rather oddly with the robust employment growth is that the percentages of people working part-time and on temporary contracts because they could not find a full-time or permanent job both rose in today's numbers. Despite the large rise in employment, wage growth remained stable in today's number with increases of 3.4 percent and 1.8 percent in real terms after taking account of inflation.

Looking forward, the outlook for the labour market is less clear than today's numbers might suggest. The level of vacancies stopped falling in today's numbers and have been hovering around 800,000 for the last three months which after a period of decline is positive news. However, the number of redundancies at 115,000 remains high compared to the figures for 2018 and early 2019. With growth muted and uncertainty still high, the most likely outcome for this coming year would be for modest employment growth overall.’

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

'In early 2020, we are planning to revise these briefings. The move to Universal Credit has meant that the level and depth of information on benefit claimants has reduced dramatically, and has meant that some of our regular analysis has become more difficult to interpret. Comments and suggestions for coverage are welcome, to my email. Benefits statistics in particular are quarterly in large part (some less frequent), so these sections are likely to move to quarterly analysis.' 

Employment rose by 208,000 between June to August 2019 and September to November 2019. In the last 12 months employment is up by 359,000.

Unemployment reduced by 7,000 between June to August 2019 and September to November 2019. The unemployment rate decreased by 0.1 percentage points to 3.8% in the quarter the lowest level since 1975.

Economic inactivity is down by 171,000 between June to August 2019 and September to November 2019. The inactivity rate fell by 0.4 percentage points to 20.6% in the quarter. Within economic inactivity, the number of long-term sick and disabled people had been rising, but was flat in the latest figures, while the number looking after their family has been falling sharply. Over the last six months, the lines have decisively crossed, and there are now 131,000 more economically inactive people who are long term sick or disabled than there are looking after their family.

Local area unemployment figures come from the claimant count of benefit claimants. The national claimant count is up by 14,900. This takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, increased by 14,100 in the month to December. Therefore, it should not be surprising that figures for local areas will show continued rises.

Youth unemployment is showing a quarterly fall. There are still 482,000 unemployed young people, and 349,000 (5.1% 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 34.6%.

A total of 54,000 were counted as in employment while on ‘government employment and training programmes’, where the Office for National Statistics continues to count Work Programme (etc.) participants as ‘in employment’ by default. This number fell by 3,000 this quarter. Self-employment has risen by 71,000 this quarter to 5.001 million. The number of employees rose by 135,000 in the quarter. Involuntary part-time employment is up by 38,000 this quarter to 0.9 million, 10.8% 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 1,306,000. It has increased by 26,000 from the figure published last month. The unemployment rate stayed 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 7.3%; (95,000) as the numbers in the claimant count have risen. 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 6,000 from last month’s figure and is now 126,000. There seems to be no trend up or down over the last two years in these numbers.

The youth long-term Jobseeker’s Allowance count (but not UC) remains far behind, at 8,100. chart 3
Chart 4: Adult long-term unemployment (12 months and over, 25+)

Adult long-term unemployment on the survey measure is now 235,000, and is trending down. The Jobseeker’s Allowance measure is 133,900.

chart 4
Chart 5: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 10.2% 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 down 0.6 for 18 to 24 year olds, down 0.1 for 25 to 49 year olds, and up 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 (981,000) has fallen in the past quarter by 26,000 , or 2.6%. The fall was largely among the inactive, with the number of unemployed young people not in full-time education or training falling at a lower rate. chart 6
Chart 7: Youth unemployment

The number of unemployed young people has risen by 9,000 since last month’s figures, to 482,000.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants fell last month by 4,700, to 237,800. There are 121,000 unemployed young people who are not in education, and do not claim Jobseeker’s Allowance, 34.6% 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 14,900 in December, taking the total to 1,241,200. ONS' claimant count before seasonal adjustment increased by 14,100 to 1,213,000. This change is directly comparable to the local level claimant count changes published today.

Learning and Work Institute's seasonally adjusted estimate is up by 16,600 to 1,241,500 chart 8
Chart 9: Vacancies – whole economy survey

Vacancies (in the Office for National Statistics survey of the whole economy) rose this month, to 805,000. 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 1.6 unemployed people per vacancy. chart 14
Chart 11: UK employment

Employment is up by 100,000 on the figure published last month, to 32,901,000. chart 15
Chart 12: Employment rate in the UK

The employment rate has risen by 0.5 percentage points over the quarter, to 76.3%. chart 16
Chart 13: Claimants for inactive benefits and the economically inactive – inactivity benefits

The number of people inactive owing to long-term sickness has flattened off, while the benefit figures track the same pattern (with data some months behind).

This chart shows claimants of Employment and Support Allowance, and Universal Credit planning for work and those with no work requirements (both out of work) (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) continued to fall while benefit measures had fallen earlier.

The benefit figures include lone parents remaining on Income Support as lone parents and Universal Credit claimants in the planning for work group. The latest DWP data does not show any still on Jobseeker's Allowance.

This chart shows claimants of out of work benefits as lone parents (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 – September to November 2019

This quarter, eight regions showed a rise in the employment rate, led by the North West and London. The employment rate fell in four regions, led by Yorkshire and the Humber and the South West. chart 19
Chart 16: Unemployment rate quarterly change in regions – September to November 2019

Six regions showed an improvement in the unemployment rate this quarter. Six showed a worsening. The rises were led by the South West and the North East. chart 20
Chart 17: Inactivity rate quarterly change in regions – September to November 2019

Overall, there was a 0.4 percentage point fall in the inactivity rate. Six regions showed rises in inactivity, led by the South West and Yorkshire and the Humber. chart 21

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