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Learning and Work Comment
The labour market figures published on 14 June point to a strong and stable labour market, and jobs for the many and not the few with the employment rate at a historic high and the unemployment rate at a 40-year low. The downside is a continuation of the decline in real wages and so the living standards of hard working families.
Duncan Melville, Chief Economist at Learning and Work Institute, commented:
"David Gauke will be pleased to start his term as Secretary of State for Work and Pensions with today's numbers. Employment growth in the three months to February to April 2017 was again strong, exceeding 100,000. Unemployment and inactivity amongst people of working age both fell. Vacancies levels stabilised at a high level.
The quarterly workforce jobs figures for the first quarter of 2017 were also released today. They also point a healthy labour market with workforce jobs up by 225,000 compared to the last quarter of 2016. This increase was driven by a rise in employee jobs, up by 244,000, with the number of self-employed down slightly.
Welcome those these numbers are they, we also see a continuation of the other post great recession trend: declining real wages and living standards. Pay growth (excluding bonuses, a better underlying measure) moderated again to just 1.7% in the three months to April, six months before pay growth was a full percentage point higher. With inflation accelerating, this translates into a fall in real pay after accounting for inflation of 0.6% in the three months to April.
The absence of pay pressures is remarkable given the tightness of the labour market. It seems that we can look forward to further rises in employment and falls in unemployment before any inflationary pressures emerge in the labour market.
One fly in the ointment may be what is happening to the number of claimant unemployed. This is up by 26,600 in the year to May 2017. More recent trends appear more volatile and may well be affected by the difficulties
are having with the seasonal adjustment of the numbers consequent on the move from Jobseeker's Allowance to Universal Credit."
In this release, the Office for National Statistics has not reported the claimant count of unemployed Universal Credit and Jobseeker's Allowance claimants. The
continue to produce the figures, but do not include them in their report. We have included them in this analysis, but the reasons that led the
to withdraw them apply to our analysis as well.
However, we are not entirely confident that the very sharp rise in the claimant count shown over the last three months are genuine rises, or just a change in the way patterns of claims are reflected in the administrative data. We continue to estimate future unemployment and vacancies per unemployed person using these figures, but we recommend a higher than usual degree of caution.
Paul Bivand, Learning and Work
for Statistics and Analysis said: "The new claims figures for Universal Credit (and to a lesser extent Jobseeker's Allowance) are particularly important as they are the first labour market figures to show the signs of any economic shocks. In the current climate of multiple sources of uncertainty affecting business and trade it is vital that we have clear sight of any large and unexpected changes. It is therefore unfortunate that we have large and annually repeated shifts in the claimant count due to these administrative changes."
The government agenda on full employment, skills reform, social justice and devolution is more uncertain than ever. But on the ground, reforms to the funding and delivery of employment programmes, health services, apprenticeships and skills have dramatically changed the environment in which we all work - and continue to be implemented while the new government's plans become clearer. So while the next few years will be times of uncertainty at home and abroad, they will also be defined by how we respond to the opportunities and challenges that we face. We will be discussing the challenges posed by labour market and other changes at the Into Work Convention in July 2017. We hope to see you there.
Employment rose by 109,000 between November to January 2017 and February to April 2017. In the last 12 months employment has grown by 372,000.
Unemployment fell by 50,000 between November to January 2017 and February to April 2017. and the unemployment rate fell 0.2 percentage points to 4.6% in the quarter the lowest level since 1975.
Economic inactivity fell by 30,000 between November to January 2017 and February to April 2017. and the inactivity rate fell 0.1 percentage points to 21.5% in the quarter, the same as last month and the lowest on record.
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 10,400 in the month to May, compared to the adjusted rise of 7,300. Therefore, it should not be surprising that figures for local areas will show falls compared to the national picture.
The proportion of people leaving the claimant count (or the ‘leavers rate’) has fallen. At 16.1%, it is now well below the level in early 2015 of 20%. The number of new claims has fallen. Jobseeker’s Allowance off-flow rates for
claimants of short durations increased. Off-flow rates remain at historically high levels.
Youth unemployment is showing a quarterly rise. There are 564,000 unemployed young people, and 366,000 (5.1% 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 56.1%.
A total of 86,000 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 5,000 this quarter. Self-employment rose 3,000 this quarter. Employee numbers rose 127,000 in the quarter. Involuntary part-time employment fell this quarter by 39,000 to 1 million, 12.4% of all part-time workers.The proportion remains 5.0 percentage points above that in 2004.
Unemployment is 1,530,000, is down by 11,000 from last month’s published figure (quarterly headline reduced by 50,000) and the unemployment rate is 4.6%, no change on last month and down 0.1 percentage points on last quarter.
The number of claimant unemployed is 802,600, up 26,600 on last year, and the claimant rate is 2.3%.
The number of workless young people (not in employment, full-time education or training) is 953,000, down 50,000 on the quarter, representing 13.4% of the youth population (down 0.7 percentage points).
Youth unemployment (including students) is 564,000, up 10,000 on the quarter.
There are 2.0 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise next month.
The employment rate is 74.8% (no change on last month’s published figure and up 0.2 percentage points in the preferred quarterly measure).