Making learning and work count

Labour market LIVE from Learning and Work Institute
18 May 2016

  • Unemployment is 1,692,000, down 8,000 from last month’s published figure (quarterly headline down 2,000) and the unemployment rate is 5.1%, no change on last month and no change on last quarter.
  • The number of claimant unemployed is 737,767, down 2,365 on last month, and the claimant rate is 2.1%.
  • The number of workless young people (not in employment, full-time education or training) is 1,036,000, up 15,000 on the quarter, representing 14.3% of the youth population (up 0.2 percentage points).
  • Youth unemployment (including students) is 631,000, up 6,000 on the quarter.
  • There are 2.2 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise next month.
  • The employment rate is 74.2% (up 0.1 percentage points on last month’s published figure and up 0.1 percentage points in the preferred quarterly measure).

Learning and Work Institute comment

The labour market figures published on 18 May suggest that the labour market is going sideways.

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

"The labour market is moving in the wrong direction with employment barely up and unemployment rising over the quarter.

The labour market has slowed, with employment showing only a modest increase and unemployment flat in the latest quarterly numbers.

In the first quarter of 2016, employment rose by 44,000 compared to quarterly employment growth of around 200,000 just a few months ago. The level of vacancies in the economy has fallen for the third month in succession. This slowing in the labour market may reflect pre-EU referendum economic uncertainties with the possibility that employers are delaying hiring decisions until the result of the June referendum is known.

The figures are unlikely, at this stage, to reflect any impact from the National Living Wage as they relate to the first quarter of 2016, before it came into force at the start of April. One worrying recent development in the labour market is that the proportion of people who are working in a temporary job because they cannot find a permanent job has stabilised at around a third in the last year, after falling in the initial labour market upswing. Full employment should not be seen simply as a matter of high employment or low unemployment, but also as allowing people to work in a way that suits their needs and aspirations."

Employment rose by 44,000 between October to December 2015 and January to March 2016. In the last 12 months employment has grown by 409,000.

Unemployment fell by 2,000 between October to December 2015 and January to March 2016 and the unemployment rate stayed at 5.1% in the quarter the lowest level for 10 years.

The 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 20,900 between March and April, compared to the adjusted fall of 2,400. Therefore, it should not be surprising that figures for local areas will show larger falls compared to the national picture.

The proportion of people leaving the claimant count (or the ‘leavers rate’) has fallen. At 18.2%, it is now well below the level in early 2015 of 20.7%. The number of new claims has fallen . Jobseeker’s Allowance off-flow rates for JSA claimants of all durations reduced. Off-flow rates, however, remain at historically high levels.

Youth unemployment is showing a quarterly rise. There are still 631,000 unemployed young people, and 414,000 (5.7% 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 are therefore not receiving official help with job search, is now 62.6% and has risen by 23 percentage points since October 2012.

A total of 101,000 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 fell 3,000 this quarter. Self-employment rose 105,000 this quarter and remains at a historically high proportion of employment. Employee numbers rose 99,000 in the quarter. Involuntary part-time employment fell this quarter by 21,000 to 1.2 million, 14.9% of all part-time workers.The proportion remains more than double that in 2004.

Chart 1: UK unemployment (ILO)

The latest unemployment figure is 1,692,000. It has fallen by 8,000 from the figure published last month. On the basis of later claimant count figures, Learning and Work Institute estimates that unemployment may rise slightly, although this remains highly uncertain. The unemployment rate stayed at 5.1%. chart 1
Chart 2: Percentage unemployed not claiming Jobseeker’s Allowance

The proportion of unemployed people not claiming Jobseeker’s Allowance or Universal Credit has risen to 57.1%; (967,000).

The number and proportion of unemployed people not claiming Jobseeker’s Allowance or UC has been rising since the new Jobseeker’s Allowance sanctions regime started in October 2012, but fell back in mid 2015 before rising again. chart 2
Chart 3: Youth long-term unemployment (six months and over, 18-24)

Youth long-term unemployment (which can include students) has risen by 3,000 from last month’s figure and is now 181,000.

The youth Jobseeker’s Allowance count remains far behind, at 33,400. The count fell by 1,000 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 362,000. The claimant count measure is 154,500. chart 4
Chart 5: Unemployment rates by age

The 18 to 24 year old unemployment rate (including students) is 12.2% of the economically active – excluding one million economically inactive students from the calculation. The rate for those aged 25 to 49 is 3.8%. For those aged 50 and over it is 3.5%. The quarterly change is up 0.2 for 18 to 24 year olds, down 0.2 for 25 to 49 year olds, and up 0.2 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 (1,036,000) has risen in the past quarter by 15,000 , or 1.45%. The rise was among both inactive and unemployed young people not in full-time education or training. chart 6
Chart 7: Youth unemployment

The number of unemployed young people has risen by 1,000 since last month’s figures, to 631,000.

Meanwhile, the number of young Universal Credit or Jobseeker’s Allowance claimants fell last month by 1,057, to 156,153. There are 259,000 unemployed young people who are not in education, and do not claim Jobseeker’s Allowance, 62.6% 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 acount fell by 11,500 in April, taking the total to 594,600. In March, the number of lone parents claiming Jobseeker’s Allowance fell by 465 to 70,565. 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 5,100 this month, to 120,300. Meanwhile the number of leavers also fell, by 2,300, to 132,100.These are just JSA claimants, so some of the fall is due to less simple claims going on to Universal Credit. 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 18.2%. chart 10
Chart 11: Jobseeker’s Allowance – claimants staying through each three-month threshold (seasonally adjusted)

These measures show a reduction in off-flows for claimants at all lengths of unemployment.

The proportion staying beyond three months has risen to 46%. Longer term claimants are less likely to be affected by moves to Universal Credit in these JSA based figures. 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 8.4%. This may fall over the next few months before rising again due to the recent falls in off-flow rates.

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 745,000. 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 2.2 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 50,000 on the figure published last month, to 31,578,000. chart 15
Chart 16: Employment rate in the UK

The employment rate rose by 0.1 percentage points over the quarter, to 74.2%. chart 16
Chart 17: Claimants for inactive benefits and the economically inactive – inactivity benefits

The number of people inactive owing to long-term sickness rose, while the benefit figure fell. 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) and benefit measures are both broadly stable.

Income Support estimates have decreased, and those for Jobseeker’s Allowance are now falling.

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 – January to March 2016

This quarter, 8 regions showed a rise in the employment rate, led by Wales and the South East of England. The employment rate fell in 4 regions, led by the East of England and Scotland. chart 19
Chart 20: Unemployment rate quarterly change in regions – January to March 2016

5 regions showed an improvement in the unemployment rate this quarter. 7 showed a worsening. The rises were led by the South West and Scotland. chart 20
Chart 21: Inactivity rate quarterly change in regions – January to March 2016

Overall, there was a 0.1 percentage point fall in the inactivity rate. 4 regions showed rises in inactivity, led by Scotland and the East of England. chart 21

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