The labour market figures published on 21 March provide some positive headline numbers but looking a little deeper raises some concerns that maybe all is not quite so rosy.
Duncan Melville, Chief Economist at Learning and Work Institute, commented:
‘While some may focus on the rise in unemployment in today's figures overall the headline numbers are positive. The rise in employment in the three months to November 2017 to January 2018 was an impressive 168,000 and also up by 101,000 compared to last month's published figure. The number of people of working age who are economically inactive, and so outside the labour market, fell substantially by 136,000. So, the picture that emerges is one of people moving into the labour market and into employment which is good both for the individuals concerned and good for the economy. This upbeat view is supported by the fact that vacancy levels remain at near record levels, albeit down slightly in the month, suggesting demand for labour remains high and by wage growth which increased again to 2.6% in January. This rate of growth remains just below inflation so real wages are still falling. However, with inflation falling we should soon see a return to positive real wage growth and rising living standards, perhaps as early as next month's figures.
Some other figures released today are, however, less positive. New quarterly workforce jobs figures were released today and in contrast with the LFS employment numbers showed a fall in employment of 64,000 in the three months to December 2017. Two thirds of this fall was accounted for by a fall in the number of self-employed jobs. The percentage of people who are in temporary employment because they could not find a permanent job rose again and has been rising for seven months now, while the percentage of people working part-time because they cannot find a full-time job appears to have stopped falling in recent months.
Finally, one interesting statistic that emerges from the workforce jobs numbers is that the number of jobs in health and social care has risen strongly both in the quarter (up 53,000) and over the year to December 2017 (up 120,000). This presumably reflects the well-known pressures on the NHS and social care services.
Overall, while today's figures are certainly more glass half full than glass half empty, the negatives identified should be kept in mind as much as positives and a continuing positive outlook for the labour market cannot be taken for granted.’
Paul Bivand, Learning and Work AD for Statistics and Analysis added: ‘ The trend rise in the claimant count now seems well established, and is flowing through to survey-based estimates of unemployment. People are staying on JSA for 12 months or more at historically high rates, when employment has been rising sharply, may be showing something about the Jobcentre regime. Learning & Work's Tony Wilson discussed this in a blog last month on whether Universal Credit would push claimant unemployment above 1.5 million.
The increase in new JSA claims since the end of Universal Credit Live Service new claims means that we can now say that, in February, two out of three new JSA claims were by people with a usual occupation in sales and customer services, while only 6% had a usual occupation in elementary jobs - which used to be one-third of new claims before the recession. ’
Employment rose by 168,000 between August to October 2017 and November 2017 to January 2018. In the last 12 months employment has grown by 402,000.
Unemployment was up by 24,000 between August to October 2017 and November 2017 to January 2018. and the unemployment rate remained at 4.3% in the quarter the joint lowest level since 1975.
Economic inactivity fell by 136,000 between August to October 2017 and November 2017 to January 2018. and the inactivity rate fell 0.3 percentage points to 21.2% in the quarter, jointly the lowest since 1971.
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, rose by 41,300 in the month to February, compared to the adjusted rise of 9,200. Therefore, it should not be surprising that figures for local areas will show larger rises compared to the national picture.
The proportion of people leaving the claimant count (or the ‘leavers rate’) has risen. At 14.2%, it is still well below the level in early 2015 of 18.3%. The number of new JSA claims has risen as the ending of new claims for Universal Credit Live Service has taken effect. Jobseeker’s Allowance off-flow rates for JSA claimants of short durations decreased.
Youth unemployment is showing a quarterly rise. There are 538,000 unemployed young people, and 358,000 (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 53.4%.
A total of 69,000 were counted as in employment while on ‘government employment and training programmes’, where the Office for National Statistics continues to count Work and Health Programme (etc.) participants as ‘in employment’ by default. This number fell 9,000 this quarter. Self-employment fell 27,000 this quarter. Employee numbers rose 190,000 in the quarter. Involuntary part-time employment rose this quarter by 2,000 to 1 million, 11.9% of all part-time workers.The proportion remains much higher than the 7.5% in 2004.