Making learning and work count

Labour market LIVE from Learning and Work Institute
10 September 2019

  • Unemployment is 1,294,000, down by 35,000 from last month’s published figure (the quarterly headline has fallen by 11,000) and the unemployment rate is 3.8%, down by 0.1 percentage points on last month and no change on last quarter.
  • The ONS figure for claimant unemployed is 1,183,400, up by 28,200 on last month, and the claimant rate is 3.3%.
  • The number of workless young people (not in employment, full-time education or training) is 986,000, which has risen by 41,000 on the quarter, representing 14.3% of the youth population (up by 0.6 percentage points).
  • Youth unemployment (including students) is 488,000, and is up by 7,000 on the quarter.
  • There are 1.6 unemployed people per vacancy.
  • The employment rate is 76.1% and showed no change on last month’s published figure and also no change in the preferred quarterly measure.

Learning and Work Institute comment

The labour market figures published on 10 September point to a labour market that is slowing and has stabilised with low unemployment and high rates of employment. However, with ongoing Brexit uncertainty this may be the calm before the storm.

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

‘Last month’s large rise in employment was a surprise. This month’s numbers, a modest rise in employment of 31,000 in the quarter to May to July 2019, was a return to the sort of increases we had seen prior to August. Hence, last month’s number appears a blip. While unemployment fell in the quarter, the number of people who are economically inactive and outside the labour market increased.

The level of vacancies fell again, the seventh month in a row of declines. The level of redundancies is also up - hovering around the 100,000 mark in recent month’s numbers compared to around 85,000 in late 2018. The claimant count, numbers of people claiming unemployment related benefits, increased again by 28,000 this month and by 271,000 in the last year. Wage growth may also be starting to stabilise. The three months to July 2019, saw wages (excluding bonuses) grow by 3.8%, while, after accounting for inflation, real wages grew by 1.8%. Both of these numbers are down very slightly by 0.1 percentage points.

Overall, the above numbers suggest that the labour market is slowing and has stabilised, but not turned down. The concern must be that ongoing Brexit related uncertainty and the possibility of No Deal/exit with a minimalist deal, will shock the economy and the labour market into a downturn. It is to be hoped that the government’s No Deal planning includes an action plan of labour market measures to help mitigate the potential adverse impact on employment and unemployment.’

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

'The rollout of Universal Credit continues to affect the benefit figures. This time last year, 40% of the people on the claimant count were on Universal Credit. Now, 83% of the higher number on the count are Universal Credit Claimants. The claimant count has increased by 445,000 since December 2015, when 14% were on Universal Credit and 630,000 on Jobseeker's Allowance.'

Employment is up by 31,000 between February to April 2019 and May to July 2019. In the last 12 months, employment rose by 369,000.

Unemployment is down by 11,000 between February to April 2019 and May to July 2019. and the unemployment rate showed no change at 3.8% in the quarter the lowest level since 1974.

Economic inactivity increased by 6,000 between February to April 2019 and May to July 2019. and the inactivity rate showed no change at 20.8% in the quarter.

The national claimant count is up by 28,200. This takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, increased by 31,500 in the month to August. So, local areas are also likely to show rises. 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 a small quarterly rise. There are 488,000 unemployed young people, and 344,000 (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 Jobseeker’s Allowance, and therefore are not receiving official help with job search, is now 37.2%.

A total of 53,000 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 increased by 16,000 this quarter. Self-employment rose by 15,000 this quarter. The number of employees rose by 6,000 in the quarter. Involuntary part-time employment has fallen by 43,000 this quarter to 0.85 million, 10.5% 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 1,294,000. It has reduced by 35,000 from the figure published last month. The unemployment rate was down by 0.1 percentage points to 3.8% on last month. chart 1
Chart 2: Percentage unemployed not claiming Universal Credit or Jobseeker’s Allowance

The proportion of unemployed people not claiming Universal Credit or Jobseeker’s Allowance has fallen to 12.2%; (158,000). chart 2
Chart 3: Youth long-term unemployment (six months and over, 18-24)

Youth long-term unemployment (which can include students) has fallen by 7,000 from last month’s figure and is now 128,000.

The youth long-term Jobseeker’s Allowance count (but not UC) remains far behind, at 10,900. The count fell by 1,200 this month, largely due to the continuing transition to Universal Credit. chart 3
Chart 4: Adult long-term unemployment (12 months and over, 25+)

Adult long-term unemployment on the survey measure is now 250,000. The Jobseeker’s Allowance measure is 138,200.

chart 4
Chart 5: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 10.5% 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 2.5%. The quarterly change is up 0.3 percentage points for 18 to 24 year olds, down 0.1 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 (986,000) has risen in the past quarter by 41,000, or 4.3%. The rise was largely among the inactive, with the number of unemployed young people not in full-time education or training rising at a lower rate. chart 6
Chart 7: Youth unemployment

The number of unemployed young people has fallen by 15,000 since last month’s figures, to 488,000.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants rose last month by 5,700, to 226,300. There are 128,000 unemployed young people who are not in education, and do not claim Universal Credit or Jobseeker’s Allowance, 37.2% 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 28,200 in August, taking the total to 1,183,400. ONS' claimant count before seasonal adjustment rose by 31,500 to 1,178,900. This change is directly comparable to the local level claimant count changes published today.

Learning amd Work Institute's seasonally adjusted estimate is up by 30,900 to 1,190,700. chart 8
Chart 9: Vacancies – whole economy survey

Vacancies (in the Office for National Statistics survey of the whole economy) fell sharply this month, to 812,000. 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 fell by 34,000 on the figure published last month, to 32,777,000. chart 15
Chart 12: Employment rate in the UK

The employment rate was stable over the quarter, at 76.1%. chart 16
Chart 13: Claimants for inactive benefits and the economically inactive – inactivity benefits

The number of people inactive owing to long-term sickness continued to rise, while the benefit figure shows a 200,000 rise to the February 2019 figures. This is calculated using the same method as the 2018 figures, counting Universal Credit claimants who are out of work and with no work requirements, as well as those with requirements to prepare for work, alongside Employment and Support Allowance claimant with no UC component (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 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 – May to July 2019

This quarter, eight regions showed a rise in the employment rate, led by Northern Ireland and the West Midlands. The employment rate fell in four regions, led by Wales and Scotland. chart 19
Chart 16: Unemployment rate quarterly change in regions – May to July 2019

Seven regions showed an improvement in the unemployment rate this quarter. Five showed a worsening. The rises were led by Scotland and the North West. chart 20
Chart 17: Inactivity rate quarterly change in regions – May to July 2019

Overall, there was no change in the inactivity rate over the quarter. Six regions showed rises in inactivity, led by Wales and Scotland. chart 21

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If you have any questions, contact Paul Bivand
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