Download Inclusion's analysis from June 2009
The labour market figures published on 17 June were better than many expected, including ourselves.
The most optimistic signs were a small fall in the number of new JSA claims and improvements in the staying on JSA rates for the shortest term claimants and or those moving through the nine-month line.
New this month are DWP experimental estimates of numbers of Employment and Support Allowance and Incapacity Benefit claimants, and lone parents on Income support, carrying the estimates almost up to date. The ESA/IB figures show a rise above the trend for the comparator group of the economically inactive due to long term sickness or disability. The lone parent claim trends are more or less in line with the comparator group of those inactive, looking after family, home, in showing continued falls, but much variation around trends.
Chart 1: UK unemployment (ILO)
The latest unemployment figure is 2,261,000, which is 46,000 above the figure published last month. We estimate, on the basis of later claimant count figures, that monthly rises in unemployment will be around the same sort of number for the next two months.
Chart 2: Youth long-term unemployment (six months and over, 18-24)
Long term unemployment on the survey measure continues to rise sharply and is now 265,000. The claimant count measure, even if one adds in young people on New Deal options, remains far behind at 94,900.
Chart 3: Adult long-term unemployment (12 months and over, 25+)
Adult long-term unemployment on the survey measure has now risen to 364,000. The claimant count measure, including people on programmes, has now started rising, as expected, one year after new claims started going up, to an estimated 139,300.
Chart 4: Unemployment rates by age
The youth unemployment rate has now reached 16.6%. The rate for those aged 25-49 is now 5.6% and for those aged 50 and over is 4.3%. The rise in unemployment rates since the recession started has been 4.4 percentage points for young people, 1.7 points for 25-49 year old and 1.4 points for the over-50s.
Chart 5: Out of work young people
The number of out of work young people who are not in full-time education has risen since January 2008 by 174,000 or 14%. The rise has been within those who are unemployed and not in full-time education. The (larger) number who are inactive and not in full-time education has fallen very slightly. The rise in the number of young JSA claimants has been slightly sharper than that in survey unemployed – now around 220,00 including those on New Deal options.
Chart 6: Jobseeker’s allowance – claimant count, new claims and leavers
The number of new claims for JSA fell by 6,000 to 358,000 in May, after seasonal adjustment. Meanwhile the number of leavers rose by 16,000 to 307,000. The claimant count will start falling once the number of leavers is greater than the number of new claims. There is still a considerable gap. We estimate that the ‘leavers rate’ – leavers as a proportion of those who could leave, has slightly improved from 16.0% last month to 16.4%. As late as April 2008, this rate was 20.6% of those who could leave JSA leaving in one month.
Chart 7: Jobseeker’s allowance – claimant count 
The rise in the JSA claimant count has now slowed to 32,000 in May, taking the total to 1,544,800.
Chart 8: Jobseeker’s allowance – claimants staying through each three-month threshold (seasonally adjusted)
There were positive changes on these measures for the shortest term group and for those passing through the nine-month line. The trend for the six-month line was flat. Rates of moving through longer thresholds continued upwards.
Chart 9: Jobseeker’s allowance – proportion of starters in month becoming longer-term unemployed
These figures are based on those in Chart 8, but show the patterns of the same people passing through successive quarterly thresholds. So far, the patterns have not reached the levels recorded in the last recession. It remains likely that around 20% of new claimants in the past few months will become 12-months unemployed by this time next year.
Chart 10: Vacancies – whole economy survey
There seems no let-up in the fall in vacancies, where the latest monthly number is 424,000. As the number of vacancies is quite volatile, the ONS gives us a three-month average, which as now reached 444,000.
Chart 11: Vacancies and unemployment ratio
The figure for vacancies as a percentage of the unemployed has now fallen to 18%. Put another way, there are now 5.6 unemployed people per vacancy compared with 2.3 in January 2008.
Chart 12: Vacancies – Jobcentre Plus new 16-hour plus vacancies
Inclusion’s analysis of Jobcentre Plus vacancies shows a slight flattening in the fall in vacancies that help people off benefits (jobs of 16 hours or more a week). The fall was only 1,000, taking the total to 182,000.
Chart 13: UK employment
Employment has fallen very sharply, by 96,000, since the figures were published last month, to 29,108,000. The fall in employment was double the rise in unemployment – the remainder became inactive – though much of the rise in inactivity was for students.
Chart 14: Employment rate in the UK
The fall in employment meant that the employment rate also continued to fall – by 0.3 percentage points to 73.3 %.
Chart 15: Claimants for inactive benefits and the economically inactive – incapacity benefits
We have added to this chart the new DWP experimental figures for ESA and IB claimants. These show claimant numbers moving above the comparator group for estimating trends, the economically inactive due to long term sickness or disability. The latest estimate remains above 2.6 million IB/ESA claimants.
Chart 16: Claimants for inactive benefits and the economically inactive - lone parents
We have added the DWP experimental estimates to this chart too – but this does not include the numbers of lone parents who are now claiming JSA following the change in rules so those with a youngest child aged 12 or more cannot claim as lone parents. The DWP estimates for lone parent benefit numbers continue to slide.
Chart 17: Employment rate quarterly change in regions – February-April 2008
This month we have added a red UK bar to the regional charts so users can see how the regional change compares with the national average. This quarter, the biggest falls in the employment rate have been in London, Northern Ireland, the East of England and Scotland. The smallest falls were in the North West and Wales.
Chart 18: Unemployment rate quarterly change in regions – February-April 2008
All regions except two, Wales and the North East, have had rises in the unemployment rate this quarter. The largest rises have been in Scotland and the two Midlands regions.
Chart 19: Inactivity rate quarterly change in regions – February-April 2008
While there was an overall smaller rise in the inactivity rate, London, Northern Ireland and the North East have seen large rises in it. 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. About half the regions continue to show falls in inactivity.
