• Unemployment is 1,382,000, down by 41,000 from last month’s published figure (quarterly headline fell by 128,000). The unemployment rate, 4.1%, fell by 0.1 percentage points on last month and is down by 0.4 percentage points on last quarter.
• The ONS figure for claimant unemployed is 1,881,100, down by 43,300 on last month, and the claimant rate is 4.7%.
• The number of workless young people (not in employment, full-time education or training) is 907,000, up 7,000 on the quarter, representing 13.3% of the youth population (up 0.8 percentage points).
• Youth unemployment (including students) is 333,000, and is down by 45,000 on the quarter.
• Vacancies in Oct-Dec 2021 rose (in the ONS official series) 33,000 to 1,247,000.
• There are now 1.1 unemployed people per vacancy, the lowest figure since the series started in 2001.
• The employment rate is 75.5% (no change on 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 18 January show that the labour market continues to recover, though employment remains below pre-pandemic levels.

Stephen Evans, Chief Executive of the Learning and Work Institute, commented:

‘The year ahead will be dominated by the cost of living crunch and labour shortages. Today’s data shows prices rose faster than wages in November. With higher inflation and tax rises still to come, the Government needs to help households: the cost of living crunch has only just begun.

At the same time, rising numbers of people with long-term sickness mean there are one million people fewer in the labour market than on pre-pandemic trends. We need to support more people to look for work for employers to fill record vacancy levels.

We must do so in a jobs market showing some signs of slowing even before any effects of Omicron. Employment is still recovering, but on the best measure remains 600,000 down on pre-pandemic levels. The Plan for Jobs has made a real difference, but the Government should not overclaim on the basis of payroll employment figures that don’t cover everyone in work. This is still mission progressing, not mission accomplished.’

Everyone at Learning and Work Institute is deeply saddened that Duncan Melville, our Chief Economist, passed away on Monday 10th January 2022. Duncan was driven by his commitment to social justice and during his time at L&W was responsible for leading our monthly analysis of new labour market data. His work, character and friendship will always be remembered by all of us, and our thoughts go to Duncan's family, to whom we send our heartfelt sympathies.

Paul Bivand, Learning and Work Associate Director for Statistics and Analysis added:

‘The rise in inflation is now causing falls in real pay, accounting for the price changes. This is a worry because the Bank of England has a remit to keep inflation around 2%. The way they do that is to raise interest rates or cut other monetary support to the economy. This tightens the screws on business finance at a time when businesses are still getting going again and have borrowed more over the pandemic. Raising interest rates like this usually causes some businesses to cut jobs, if not fail as businesses.

At a time when employment is still below pre-pandemic levels, and hours worked are still 3.2% down, this is a time to be increasing employment and hours worked, not causing cutbacks. If the economically inactive could be supported to look for work, this could increase economic activity and help with labour shortages.’

Employment is up by 60,000 between June to August 2021 and September to November 2021. In the last 12 months employment rose by 171,000. The timelier but less comprehensive measure of PAYE employees increased by 184,000 in December 2021 compared to the previous month and is 410,000 above its pre-pandemic level.

Unemployment fell by 128,000 between June to August 2021 and September to November 2021. The unemployment rate is down by 0.4 percentage points to 4.1% in the quarter.

Worryingly, economic inactivity is now rising again, after falling in the second half of 2021. This helps to explain the difficulty some employers are reporting in filling vacancies - there are fewer people looking for or available for work. The 2.3 million people economically inactive due to long-term sickness or disability, up 5.5% in the last quarter, should be a key focus. Economic inactivity has risen by 66,000 between June to August 2021 and September to November 2021. The inactivity rate increased by 0.2 percentage points to 21.3% in the quarter. In the last 12 months inactivity rose by 133,000 to 8.8 million.

The national claimant count fell by 43,300.

Youth unemployment is down by 45,000. There are 453,000 unemployed young people, and 286,000 (4.2% of the youth population) who are unemployed and not in full-time education.

Self-employment fell by 217,000 this year. The number of employees increased by 384,000 over the year. Involuntary part-time employment decreased by 92,000 this quarter to 0.9 million, 11.4% of all part-time workers.

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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