Making learning and work count

Labour market LIVE from Learning and Work Institute
18 January 2017

 
  • Unemployment is 1,604,000, down 12,000 from last month’s published figure (quarterly headline down 52,000) and the unemployment rate is 4.8%, no change on last month and down 0.1 percentage points on last quarter.
  • The number of claimant unemployed is 797,800, down 10,100 on last month, and the claimant rate is 2.3%.
  • The number of workless young people (not in employment, full-time education or training) is 1,014,000, down 5,000 on the quarter, representing 14.1% of the youth population (down 0.1 percentage points).
  • Youth unemployment (including students) is 573,000, down 52,000 on the quarter.
  • There are 2.1 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise next month.
  • The employment rate is 74.5% (up 0.1 percentage points on last month’s published figure and down 0.1 percentage points in the preferred quarterly measure).

Learning and Work Institute comment

The labour market figures published on 18 January are at first sight another set of concerning figures. However, there are perhaps some more positive signs in the numbers.

Duncan Melville, Chief Economist at Learning and Work Institute, commented:

"In the three months to September to November 2016, unemployment fell but only because of a rise in economic inactivity amongst people of working age, rather than expanding employment, in the quarter. However, the latest monthly changes look more positive with employment rising and both unemployment and economic inactivity amongst people of working age falling. This is a set of outcomes more consistent with improving labour market outcomes. In addition, the latest numbers for the claimant count show a fall of 10,000 between November and December 2016. This follows a nine-month period of rising numbers.

However, all is not rosy and today's numbers were also the second consecutive month for falling vacancy levels. While there are some signs of improvement in the labour market in today's numbers it is also clear, comparing employment growth now with that seen in the first half of last year, that the labour market is still in slow growth mode. This is also the consensus amongst independent economic forecasters. The latest Treasury survey of independent forecasters, also published today, showed that their current expectation is for modest economic growth of 1.4% and modest employment growth of just 0.2% in 2017. "

Nearly 90% of JSA claimants leave benefit inside 1 year, But the percentage staying 1 year has risen over 10% for the first time in 3 years. Stephen Evans, Learning and Work Chief Executive says "We need to understand why this is and help people get back to work as soon as possible".

Employment fell by 9,000 between June to August 2016 and September to November 2016. In the last 12 months employment has grown by 294,000.

Unemployment fell by 52,000 between June to August 2016 and September to November 2016, and the unemployment rate remained at 4.8% the lowest level since 2005.

Economic inactivity rose by 85,000 between June to August 2016 and September to November 2016, and the inactivity rate rose 0.2 percentage points to 21.7% in the quarter.

The small rise in the claimant count takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, fell by 6,800 in the month to December, compared to the adjusted fall of 10,100. Therefore, it should not be surprising that figures for local areas will show smaller falls compared to the national picture.

The proportion of people leaving the claimant count (or the ‘leavers rate’) has fallen. At 16.7%, it is now well below the level in early 2015 of 20.7%. The number of new claims has fallen.

Youth unemployment is showing a quarterly fall. There are still 573,000 unemployed young people, and 380,000 (5.3% 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 52.2% and has risen by more than 20 percentage points since October 2012.

A total of 75,000 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 rose 8,000 this quarter. Self-employment fell 17,000 this quarter. Employee numbers fell 8,000 in the quarter. Involuntary part-time employment rose this quarter by 7,000 to 1.15 million, 13.7% 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 1,604,000. It has fallen by 12,000 from the figure published last month. On the basis of later claimant count figures, Learning and Work Institute estimates that unemployment may continue to decrease, although this remains highly uncertain. The unemployment rate did not change, at 4.8%. chart 1
Chart 2: Percentage unemployed not claiming Jobseeker’s Allowance

The proportion of unemployed people not claiming Jobseeker’s Allowance has fallen to 49.7%; (797,000).

The number and proportion of unemployed people not claiming Jobseeker’s Allowance had previously risen since October 2012. 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 14,000 from last month’s figure and is now 156,000.

The youth long-term Jobseeker’s Allowance count (but not UC) remains far behind, at 26,800. The count fell by 1,400 this month. Work Programme participants are included within the count unless they are in paid work. chart 3
Chart 4: Adult long-term unemployment (12 months and over, 25+)

Adult long-term unemployment on the survey measure is now 311,000. The Jobseeker’s Allowance measure is 150,900.

chart 4
Chart 5: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 11.1% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 3.9%. For those aged 50 and over it is 3.1%. The quarterly change is down 1.0 percentage points for 18 to 24 year olds, up 0.1 percentage points for 25 to 49 year olds, and down 0.1 percentage points 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 (1,014,000) has fallen in the past quarter by 5,000 , or 0.5%. The fall was entirely among the unemployed, with the number of inactive young people not in full-time education or training rising by 29,000. chart 6
Chart 7: Youth unemployment

The number of unemployed young people has fallen by 15,000 since last month’s figures, to 573,000.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants fell last month by 5,853, to 177,322. There are 198,000 unemployed young people who are not in education, and do not claim Jobseeker’s Allowance, 52.2% of all unemployed young people who are not students. chart 7
Chart 8: Jobseeker’s Allowance – claimant count

The Jobseeker’s Allowance and Universal Credit claimant count fell by 10,100 in December, taking the total to 797,800.

In September, the number of lone parents claiming Jobseeker’s Allowance was 67,700. 13.5% of JSA claimants and 8.5% of the JSA/UC claimant count. Lone parents with a youngest child aged five or over can only claim Jobseeker’s Allowance, unless they have other reasons for claiming benefit. chart 8
Chart 9: Jobseeker’s Allowance – new claims and leavers

The number of new Jobseeker’s Allowance claims fell by 2,600 this month, to 97,400. Meanwhile the number of leavers also fell, by 3,100, to 106,200.These figures are reduced by the phased switch to Universal Credit for new claimants. chart 9
Chart 10: Jobseeker’s Allowance – claimant count leavers rate – leavers as percentage of ‘could leave’

Learning and Work Institute estimates that the ‘leavers rate’ – people who have left the claimant count as a proportion of those who could leave it – has fallen to 16.7%. chart 10
Chart 11: Jobseeker’s Allowance – claimants staying through each three-month threshold (seasonally adjusted)

These measures show an increase in off-flow rates for claimants at all lengths of unemployment.

The proportion staying beyond three months has fallen to 45.6%, but remains high by recent standards. Short-term claimants are mainly supported by Jobcentre Plus, although some will be Work Programme participants who have not sustained jobs. chart 11
Chart 12: Jobseeker’s Allowance – proportion of starters in month becoming longer-term unemployed

The proportion of starters becoming 12-month claimants is now over 10% at 10.3%. This may fall over the next few months as the proportion of starters becoming 9-month claimants has fallen by 0.9 percentage points over the last three months.

These figures are based on those in Chart 11, but show the patterns of the same people passing through successive quarterly thresholds. chart 12
Chart 13: Vacancies – whole economy survey

Vacancies (in the Office for National Statistics survey of the whole economy) fell this month, to 748,000. As the number of vacancies is quite volatile, and frequently revised, the Office for National Statistics uses a three-month average. chart 13
Chart 14: Unemployed people per vacancy

There are 2.1 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise slightly next month. chart 14
Chart 15: UK employment

Employment rose by 40,000 on the figure published last month, to 31,802,000. It fell 9,000 in the preferred quarterly measure. chart 15
Chart 16: Employment rate in the UK

The employment rate fell by 0.1 percentage points over the quarter, to 74.5%. chart 16
Chart 17: Claimants for inactive benefits and the economically inactive – inactivity benefits

The number of people inactive owing to long-term sickness fell in the quarter, as did the benefit figure. The benefit figures show ‘early estimates’ of benefit numbers.

This chart shows claimants of Employment and Support Allowance, and Incapacity Benefit (the orange dots), compared with survey figures for the economically inactive owing to long-term sickness. chart 17
Chart 18: Claimants for inactive benefits and the economically inactive – lone parents

The survey figures (showing those looking after family) fell while benefit measures fell slowly.

Income Support estimates have decreased, and those for Jobseeker’s Allowance are falling. Lone parents with a youngest child aged five or six have moved on to Jobseeker’s Allowance as part of welfare reform.

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 19: Employment rate quarterly change in regions – September to November 2016

This quarter, 6 regions showed a rise in the employment rate, led by Yorkshire and The Humber and the South West. The employment rate fell in 6 regions, led by the East of England and Wales. chart 19
Chart 20: Unemployment rate quarterly change in regions – September to November 2016

6 regions showed an improvement in the unemployment rate this quarter. 6 showed a worsening. The rises were led by the East of England and Scotland. chart 20
Chart 21: Inactivity rate quarterly change in regions – September to November 2016

Overall, there was a 0.2 percentage point rise in the inactivity rate. 9 regions showed rises in inactivity, led by Wales and Northern Ireland. chart 21

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