Download Inclusion's July 2010 labour market analysis
The labour market figures published on Wednesday 14 July showed a sharp rise in employment and a slow but definite fall in ILO unemployment. The JSA claimant count is now trending sharply downwards, and there are very positive signs for longer-term claimants too. The figures show a particularly welcome improvement in the Northern English regions, although Scotland and Wales are still declining.
Chart 1: UK unemployment (ILO)
The latest unemployment figure is 2,468,000, which is a fall of 51,000 from the figure published last month. We estimate, on the basis of later claimant count figures, that unemployment may fall next month, although this remains highly uncertain.
Chart 2: Percentage unemployed not claiming Jobseeker’s Allowance
In previous recessions, the proportion of the unemployed not claiming benefit has shrunk to around zero. This recession, we started with a historically high proportion of unemployed not claiming Jobseeker’s Allowance. The proportion not claiming fell, as expected. The latest data shows the proportion not claiming JSA rising strongly to 40% (956,000).
Chart 3: Youth long-term unemployment (six months and over, 18-24)
Youth long-term unemployment (which can include students) fell by 4,000 from last month's figure and is now 338,000. The claimant count measure, even if one adds in young people on New Deal options and the Community Task Force, remains far behind at 125,000, and is falling.
Chart 4: Adult long-term unemployment (12 months and over, 25+)
Adult long-term unemployment on the survey measure has now risen to 576,000. The claimant count measure, including people on programmes, has risen to an estimated 246,000. The twelve-month plus claimant figure is now flat, but the estimate for numbers on programmes has risen, continuing the overall rise.
Chart 5: Unemployment rates by age
The youth unemployment rate (including students) has now fallen to 17.1%. The rate for those 25-49 is now 6.3% and for those 50 and over is 4.6%. The rise in unemployment rates since the recession started has been 4.9 percentage points for young people, 2.4 points for the 25-49 and 1.8 points for the over-50s.
Chart 6: Out of work young people
The number of out of work young people who are not in full-time education has fallen since April 2009 by 74,000 or 5.2%. The fall has affected the unemployed and the larger number of inactive, both not in full-time education. The number of unemployed in full-time education has risen sharply whilst the workless groups not in full-time education has fallen, to 300,000 in this month’s survey figures. These figures are seasonally adjusted to take into account normal holiday patterns. The fall in the number of young JSA claimants had been slower than that in survey unemployed – with the total now around 440,000 including those on DWP programmes, and has been falling since October 2009.
Chart 7: Jobseeker’s allowance – claimant count, new claims and leavers
The number of new claims for JSA continued to slide downwards this month, to the lowest level since November 2008. This includes online claims. Meanwhile the number of leavers also slowly dropped. We estimate that the 'leavers rate' – leavers as a proportion of those who could leave - has risen from last month’s 18.4% to 18.5%.
Chart 8: Jobseeker’s allowance – claimant count
The JSA claimant count fell by 20,800 in June, taking the total to 1,460,100. The fall was lower than last month’s 31,100 (after revisions), but still sharp.
Chart 9: Jobseeker’s allowance – claimants staying through each three-month threshold (seasonally adjusted)
There were positive changes on these measures for all groups. The trends for longer-term unemployed groups are particularly positive and are now down to pre-recession levels.
Chart 10: Jobseeker’s allowance – proportion of starters in month becoming longer-term unemployed
These figures are based on those in Chart 9, but show the patterns of the same people passing through successive quarterly thresholds. This shows a consistently improving picture. The flow rate through three months reached 57.4% in April 2009, very close to the December 1990 level. This group, who initially claimed in the quarter to January 2009, have now reached the 15-month mark, with 9.6% remaining, compared to 18.6% of the December 1990 group. The more recent patterns would indicate that the proportion reaching twelve months may fall further, towards DWP’s objective of 8%. This is subject to possible negative changes from inflows into JSA of IB/ESA claimants who have been out of work for several years, and who may flow off JSA more slowly.
Chart 11: Vacancies – whole economy survey
Vacancies (in the ONS survey of the whole economy) improved slightly this month to 486,000. As the number of vacancies is quite volatile, the ONS uses a three-month average.
Chart 12: Vacancies and unemployment ratio
Vacancies as a percentage of the unemployed has now risen slightly to 20.3%. The ONS has now started publishing figures for unemployed people per vacancy, which we are now using, with the exception of the latest figure, which is our estimate. The ONS figures show there are now 5.1 unemployed people per vacancy compared with 2.3 in March 2008.
Chart 13: Vacancies – Jobcentre Plus new 30-hour plus vacancies
Inclusion’s analysis of Jobcentre Plus vacancies shows a small rise in full-time vacancies. This took the total to 247,000 new vacancies a month in April-June.
Chart 14: UK employment
Employment rose by 120,000 on the figure published last month, to 28,984,000. The headline quarterly rise was 160,000.
Chart 15: Employment rate in the UK
The employment rate rose to 72.3%. The rise looks less sharp than for the employment numbers as the percentage is calculated on a rising population.
Chart 16: Claimants for inactive benefits and the economically inactive – incapacity benefits
This shows claimants of Incapacity Benefit and Employment and Support Allowance (the red dots), compared with survey figures for the economically inactive due to long-term sickness. These show a sharp rise in the survey measures of inactivity due to long-term sickness in the last six months, which does not appear in the DWP experimental estimates for ESA/IB claimants since November 2009. These figures will include in both measures lone parents who have health problems and are economically inactive and claiming ESA or IB, although there is a measure of doubt about how they respond to surveys about the reason for not looking for work.
Chart 17: Claimants for inactive benefits and the economically inactive - lone parents
This shows claimants of Income Support as lone parents plus lone parents claiming Jobseeker’s Allowance (the red squares) and survey figures for those economically inactive looking after family. Lone parents who now have to claim JSA as their youngest child is 10 or more (53,730 in May 2010) or other lone parent JSA claimants (11,035) are included in the benefit measure. Lone parents claiming ESA or IB will not be included in the lone parent claimant category. Both measures are highly volatile (despite the survey measures being seasonally adjusted) but are in broad agreement around a reducing trend.
Chart 18: Employment rate quarterly change in regions – March 2010 to June 2010
This quarter, the biggest falls in the employment rate have been in the South East, Wales and Scotland. The North East, Yorkshire and the Humber and the West Midlands showed large improvements.
Chart 19: Unemployment rate quarterly change in regions – March 2010 to June 2010
Seven out of 12 regions showed improvements in the unemployment rate this quarter. The largest improvements were in the West and East Midlands and Yorkshire and the Humber. The largest rises in the unemployment rate were in Northern Ireland, Scotland and London.
Chart 20: Inactivity rate quarterly change in regions – March 2010 to June 2010
There was overall a small fall in the inactivity rate. The South East, East Midlands, and Wales have seen large rises in the inactivity rate. This is a potential concern, particularly if, and we do not yet know whether this is the case, the rise in inactivity is not simply students. The North east, Northern Ireland and Yorkshire and the Humber show large quarterly falls in economic inactivity.
