Our labour market analysis

January 2017

Learning and Work 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.

Key Facts

  • 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).