Making learning and work count

Labour market LIVE from Learning and Work Institute
16 August 2017


  • Unemployment is 1,484,000, down by 11,000 from last month’s published figure (quarterly headline fell by 57,000) and the unemployment rate is 4.4%, down 0.1 percentage points on last month and down 0.2 percentage points on last quarter.
  • The number of claimant unemployed is 807,800, down 4,200 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 958,000, down 7,000 on the quarter, representing 13.5% of the youth population (no quarterly change.
  • Youth unemployment (including students) is 545,000, down 17,000 on the quarter.
  • There are 1.9 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise slightly next month.
  • The employment rate is 75.1% (up 0.2 percentage points on last month’s published figure and up 0.3 percentage points in the preferred quarterly measure).

Learning and Work Institute comment

The labour market figures published on 16 August show another strong increase in employment, with unemployment and economic inactivity amongst people of working age both falling. However, while the job prospects for individuals are encouraging, people in work are getting poorer with real wages again falling.

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

“Employment growth in the three months to April to June 2017 was again strong and exceeded 100,000 for the fourth consecutive month. Unemployment and levels of inactivity amongst people of working age both fell. The working age employment and inactivity rates again reached record highs and lows respectively, and the unemployment rate fell to 4.4%, the lowest level for 42 years.

Annual wage growth (regular pay excluding bonuses) was 2.1%, in the three months April to June 2017. However, this is below the current inflation rate and real wages declined, by half a percent, for the fourth month in a row.

While the overall labour market continues to be strong, the impact of Brexit can be seen in a slowdown of employment growth amongst EU nationals in the UK. This growth in the year to June 2017 was 5.6% less than half the rate of growth seen a year ago, before the EU referendum.

If as seems likely, and today’s figures appear to herald, workers from the EU become less of an option for UK employers then this reduction in labour and skills supply will need to be filled from domestic sources. With the labour market already as tight as it is, with high employment and low unemployment, this will be a challenge and this points to the heightened importance of effective skills and employment policies, including both lifelong learning so that individuals can update their skills in response to changing economic demands and the recruitment and retention of disabled people, where today's figures continue to show that less than 50% of disabled people are in employment.”

Employment rose by 125,000 between January to March 2017 and April to June 2017. In the last 12 months employment has grown by 338,000.

Unemployment fell by 57,000 between January to March 2017 and April to June 2017. and the unemployment rate fell 0.2 percentage points to 4.4% in the quarter the lowest level since 1975.

Economic inactivity fell by 64,000 between January to March 2017 and April to June 2017. and the inactivity rate fell 0.2 percentage points to 21.3% in the quarter, a new record low.

The small fall 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 5,200 in the month to July, compared to the adjusted fall of 4,200 Therefore, it should not be surprising that figures for local areas will show slightly larger falls compared to the national picture.

The proportion of people leaving Jobseeker’s Allowance (or the ‘leavers rate’) has fallen. At 16%, it is now well below the level in early 2015 of 18.8%. The number of new claims has fallen. Jobseeker’s Allowance off-flow rates for JSA claimants of short durations increased. Off-flow rates remain at historically high levels. We continue to comment on JSA statistics as they remain 60% of the claimant count.

Youth unemployment is showing a quarterly fall. There are still 545,000 unemployed young people, and 359,000 (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 or Universal Credit and therefore are not receiving official help with job search is now 55.2%.

A total of 70,000 were counted as in employment while on ‘government employment and training programmes’. This number fell 26,000 this quarter to a record low. Self-employment rose 21,000 this quarter and is 15% of employment. Employee numbers rose 134,000 in the quarter. Involuntary part-time employment fell this quarter by 3,000 to 1.03 million, 12.3% of all part-time workers. The proportion remains nearly double that in 2004.

Chart 1: UK unemployment (ILO)

The latest unemployment figure is 1,484,000. It has fallen by 11,000 from the figure published last month. On the basis of later claimant count figures, Learning and Work Institute estimates that unemployment may flatten, although this remains highly uncertain. The unemployment rate fell by 0.1 percentage points to 4.4%. chart 1
Chart 2: Percentage unemployed not claiming Jobseeker’s Allowance or Universal Credit

The proportion of unemployed people not claiming Jobseeker’s Allowance or Universal Credit has fallen to 45.5%; (675,000). 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 8,000 from last month’s figure and is now 153,000.

The youth long-term Jobseeker’s Allowance count (but not UC) remains far behind, at 20,300. The count fell by 200 this month. 35% of Universal Credit claimants are aged under 25, so the JSA figures will under-count long-term claims. chart 3
Chart 4: Adult long-term unemployment (12 months and over, 25+)

Adult long-term unemployment on the survey measure is now 294,000. The Jobseeker’s Allowance measure is 146,400.

chart 4
Chart 5: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 10.8% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 3.4%. For those aged 50 and over it is 2.9%. The quarterly change is up 0.2 for 18 to 24 year olds, down 0.3 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 (958,000) has fallen in the past quarter by 7,000, or 0.7%. The fall was largely among the unemployed, with the number of inactive young people not in full-time education or training (600,000) showing no change. chart 6
Chart 7: Youth unemployment

The number of unemployed young people has fallen by 17,000 since last month’s figures, to 545,000.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants fell last month by 3,700, to 157,000. There are 198,000 unemployed young people who are not in education, and do not claim Jobseeker’s Allowance or Universal Credit, 55.2% of all unemployed young people who are not students. chart 7
Chart 8: Jobseeker’s Allowance and Universal Credit claimant count

The Jobseeker’s Allowance and Universal Credit claimant count fell by 4,200 in July, taking the total to 807,800. 486,200, or 60% of these are JSA claimants. The majority of unemployed benefit claimants continue to claim JSA, rather than Universal Credit.

In June , the number of lone parents claiming Jobseeker’s Allowance was 63,900. 13.8% of JSA claimants and 7.9% 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 another benefit or are in Universal Credit Full Service areas. chart 8
Chart 9: Jobseeker’s Allowance – new claims and leavers

The number of new Jobseeker’s Allowance claims fell by 5,000 this month, to 84,400. Meanwhile the number of leavers also fell, by 1,600, to 92,600. These figures are affected by the continued roll-out of Universal Credit. Nevertheless, if there was a downturn, there would be a turn upwards in new JSA claims in areas not covered by Universal Credit Full Service. 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% continuing its trend. chart 10
Chart 11: Jobseeker’s Allowance – claimants staying through each three-month threshold (seasonally adjusted)

These measures show decline in JSA off-flow for claimants at all lengths of unemployment, except the shortest term.

The proportion staying beyond three months is 48%, well above rates two years ago. chart 11
Chart 12: Jobseeker’s Allowance – proportion of starters in month becoming longer-term unemployed

The proportion of JSA starters becoming 12-month claimants is now 11.5%. This is likely to rise over the next few months as the proportion of starters becoming 9-month claimants has risen by 0.3 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 768,000. 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 1.9 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 63,000 on the figure published last month, to 32,073,000. chart 15
Chart 16: Employment rate in the UK

The employment rate rose by 0.3 percentage points over the quarter, to 75.1%. chart 16
Chart 17: Claimants for inactive benefits and the economically inactive – inactivity benefits

The number of people inactive owing to long-term sickness is broadly stable, while the benefit figure shows falls. DWP have ceased to produce early estimates of benefit numbers, so the latest figures are for December 2016.

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 also fell.

Income Support estimates have decreased, and those for Jobseeker’s Allowance are flat. Universal Credit Full Service claimants are not included in these figures.

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 – April to June 2017

This quarter, 7 regions showed a rise in the employment rate, led by Scotland and London. The employment rate fell in 5 regions, led by Wales and the East Midlands. chart 19
Chart 20: Unemployment rate quarterly change in regions – April to June 2017

8 regions showed an improvement in the unemployment rate this quarter. 4 showed a worsening. The rises were led by the East and the North East. chart 20
Chart 21: Inactivity rate quarterly change in regions – April to June 2017

Overall, there was a 0.2 percentage point fall in the inactivity rate. 5 regions showed rises in inactivity, led by the East Midlands and Wales. chart 21

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