Download Inclusion's analysis from January 2009.
Chart 1: UK Unemployment
Unemployment reached 1,923,000 in the September-November 2008 period. This was a 7.3% increase over the quarter before. Inclusion forecasts that if unemployment rises at the same rate as the JSA claimant count, the November-January figure will be just under 2.2 million. Therefore, the two million by Christmas mark is still on course.
There is no sign of any slackening in the rise of unemployment.
Chart 2: Unemployment rates by age
In the last quarter, there was a 55,000 increase in unemployed 18-24 year olds, a 41,000 rise in unemployed 25-49s and a 31,000 rise in unemployed people over 50. The unemployment rate for young people has now reached 14.5%, compared with 4.6% for 25-49s and 3.5% for the over-50s. However, the rise in unemployment has been most rapid for the over-50s at 11.9% this quarter, followed by 9.9% for the 18-24s and 5.2% for the 25-49s.
Chart 3: JSA claimant count - new claims and leavers
There is no slackening in the rise in new JSA claims. There was a 7.8% rise in the last month alone. The annual rise is 59%. Numbers of JSA leavers rose slightly. This is the pattern expected when there are more people who could leave JSA and follows experience in previous recessions. The annual rise in leavers is 11.2%.
Chart 4: JSA claimant count
The claimant count number is accelerating upward. Last month’s figure has been revised up by 7,400 so the latest total of 1,157,200 is 85,300 higher than the last figure published, rather than the 77,900 change figure given. The latest number will be open for revision next month.
The gap between unemployment and the JSA claimant count remains large. Overall, 52% of the unemployed claim JSA. More men claim JSA, with 75% of unemployed men claiming, compared with 38% of unemployed women.
Chart 5: JSA - claimants staying through each three-month threshold (seasonally adjusted)
The rates of staying on JSA have been rising for claimants who have been on JSA for all durations. The increases since January 2008 have been 8-10 percentage points for all duration groups except those where young people can be sent off JSA onto new deal options, where the rise is only 6.5 percentage points. These rises in the rates of staying on for a further three months have been close to parallel for the duration groups, following a low point in autumn-winter 2007.
However, the rate of becoming 12-month (long-term) unemployed has risen much less sharply. This is owing to the very low rates of becoming three-month claimants in winter 2007-08, and the slow acceleration in rates of staying on past subsequent thresholds.
Chart 6: Jobseeker's allowance - proportion of starters in month becoming longer-term unemployed
A different way of looking at the long-term unemployed figures is to look at the proportion of people who claimed JSA in a particular month who are still there. For people who started claiming in the quarters to 2007, June 2008 and September 2008, the proportions still on JSA three months later were very similar at around 45%. However, their later experience differs. As the slowdown has turned into recession, higher proportions of the later groups have remained on benefit through each threshold. This is shown by each subsequent curve being flatter.
The latest group, the people shown as 3-6 month unemployed in the January figures, had a much higher rate of becoming 3-month unemployed – over 50%. Unless the rates of staying on through each later quarterly threshold fall, which would require new policies, there is every chance of 15% of these claimants becoming 12-15 month unemployed in November 2009.
Chart 7: Vacancies - whole economy survey
There are still just over 500,000 vacancies shown in the ONS vacancy survey. In December 2008, there were 512,000 vacancies for which employers were actively recruiting. The rate of fall of the vacancy number eased slightly this month, which may have been owing to the earlier sales this year than last. Other relevant factors could include temporary vacancies covering care assistants who were sick in nursing and care homes. This varies annually with the differing patterns of flu incidence and other winter sickness factors.
Chart 8: Vacancies - Jobcentre Plus new 16-hour plus vacancies
Inclusion’s analysis centres on vacancies which can count as a job outcome for Jobcentre Plus and providers – jobs lasting for 16 hours or more a week. In December 2008, 28% of new Jobcentre Plus vacancies were for jobs under 16 hours a week. Inclusion has adjusted the Jobcentre Plus vacancies for seasonal factors and averaged the results over a three-month window to produce figures on a similar basis to the ONS’ survey of employers.
These estimates show a fall in Jobcentre vacancies over the year to December 2008 of 22.2%, compared with a fall in the ONS vacancy survey of 22.4% for the three-month average series.
In December 2008, there were 226,000 new Jobcentre Plus 16-hour plus vacancies compared with 320,800 new JSA claimants and 1,157,200 total JSA claimants. This is without taking into account employment and support allowance and other incapacity benefits claimants or lone parents on income support.
The fact that Jobcentre Plus vacancies are falling in parallel with overall vacancies shows that efforts to increase vacancies available to Jobcentre Plus customers have not yet borne fruit.
Chart 9: UK employment
The latest monthly figure for employment shows a very slight rise over the last published figure. The ONS advise using quarterly changes, which continue to show a fall. However, a flattening in the numbers employed is a fairer summary at this stage.
Similar patterns are shown for the employment rate.
Chart 10: Employment rate in the UK
Chart 11: Claimants for inactive benefits and the economically inactive - incapacity benefits
We have no up-to-date figures for claimants of employment and support allowance or other incapacity benefits, or for lone parent claimants of income support, the latest being May 2008. Both groups have been subject to changes in benefits and conditionality. We do, however, have figures for the economically inactive who give either long-term sickness or looking after children or family as the reason. Incapacity benefits claimants are likely to give the first reason, and lone parents the second.
The number of the inactive, long term sick was rising sharply from mid-2008, coincident with rises in new JSA claims, and though has since dropped back, still remains at a higher level than previously. The patterns for lone parents follow the 'inactive, looking after family' quite closely with a large drop in late 2007, but since then there have been movements in those primarily looking after family that have not been followed by lone parent numbers. The most recent rise in 'inactivity, looking after family' could easily be a displacement activity as jobs are no longer available.
Chart 12: Claimants for inactive benefits and the economically inactive - lone parents
Chart 13: Employment rate quarterly change in regions - Sep-Nov 2008
Chart 14: Unemployment rate quarterly change in regions - Sep-Nov
2008
Chart 15: Inactivity rate quarterly change in regions - Sep-Nov 2008
