Making learning and work count

Labour market LIVE from Learning and Work Institute
18 January 2022

  • 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.

Chart 1: UK unemployment (ILO)

The latest unemployment rate fell by 0.1 percentage points on last month's figure to 4.1%. chart 1
Chart 2: The claimant count and UK unemployment compared

The number of unemployed people who are claiming unemployment-related benefits is now 498,800 higher than the number of unemployed in the official measure (as shown in Chart 1). chart 2
Chart 3: Youth unemployment

The number of unemployed young people is down by 6,000 since last month’s figures, to 453,000.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants has fallen by last month by 10,900, to 311,300. 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 (907,000) rose by 53,000 in the last quarter, or 6.2%. The rise was entirely among the inactive, with the number of unemployed young people not in full-time education or training falling. chart 6
Chart 5: Youth long-term unemployment (six months and over, 18-24)

Youth long-term unemployment (which can include students) is down by 14,000 over the last quarter and is now 157,000.It is still 11,000 higher than before the pandemic.

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

Adult long-term unemployment on the survey measure is now 334,000. There are 96,000 more people aged 25 and over out of work for 12 months or more than before the pandemic (Dec 19-Feb 20), though there are signs this may now be falling (either due to people finding work or moving into economic inactivity).

chart 4
Chart 7: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 9.8% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 3.1%. For those aged 50 and over it is 3.2%. The quarterly change is down 1.0 percentage points for 18 to 24 year olds, down 0.4 points for 25 to 49 year olds, and no change 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 0.7 percentage points down on February 2020. The change for those aged 25 to 34 is up 0.3 percentage points. The change for those aged 35 to 49 is 0.3 points up. The change for those aged 50 to 64 is 0.3 points up. There is no change for those aged over 65.

chart 5

Chart 9: Vacancies – whole economy survey

Headline vacancies this month rose by 33,000 to 1,247,000. The ONS' experimental single-month vacancy figures has fallen by 36,000 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

ONS vacancies (single month) by sector show rises compared with 2019 (pre-pandemic) across the board, but some rises much bigger (open image in new tab). 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 1.1 unemployed people per vacancy. This is now a record low number of unemployed per vacancy since the series started in 2001. chart 14
Chart 12: Online vacancies to early January 2022 from Adzuna

Overall online vacancies are 117% of Feb 2020. They are 21% down from their maximum. Compared with the same week in 2018, the overall vacancy level is up 26%. The online vacancies figures covering the period up to Friday, January 7, 2022 are dominated by the annual seasonal fall in recruiting. In this analysis we compare with 2018, as vacancies were lower through 2019 than through 2018. Any additional impact from the Omicron variant and restrictions may be harder to identify compared with the seasonal effect. chart 14
Chart 13: UK employment

Employment fell by 30,000 on the figure published last month, to 32,475,000. The chart shows both the official figures and the experimental weekly figures. The trend shown by the experimental weekly figures is likely to be downwards. chart 15
Chart 14: Employment rate in the UK

The employment rate increased by 0.2 percentage points over the quarter, to 75.5%. The chart shows both the official figures and the experimental weekly figures. The trend is likely to be flat. chart 16
Chart 15: 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 risen sharply in the last three months to 2.32 million working age people. chart 17
Chart 16: Economic inactivity – people looking after family

The survey figures showing those looking after family and not doing paid work or looking for paid work had been trending downwards but has started rising. chart 18
Chart 17: 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 higher level than before the pandemic. The increase over the pre-pandemic level is now 164,000. chart 18
Chart 18: Employment rate two-year change in regions – September to November 2021

Compared with 2019, the employment rate rose in three regions, led by the Eastern region and London. The employment rate fell in nine regions, led by the South West, the East Midlands and the North West. chart 19
Chart 19: Unemployment rate two-year change in regions – September to November 2021

Compared with 2019, the unemployment rate rose in nine regions, led by Northern Ireland, London and the South East. The unemployment rate fell in one region, the North East. chart 20
Chart 20: Inactivity rate two-year change in regions – September to November 2021

Compared with 2019, the economic inactivity rate rose in nine regions, led by the South West, the East Midlands and the North West. The inactivity rate fell in three regions, led by London and the Eastern region. chart 21 -->

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