Concerning Fall in Employment

By Duncan Melville, Chief Economist at Inclusion
"Employment for April to June was down by 63,000 compared to the previous three months and unemployment rose by 25,000 in the quarter. This is the second consecutive month in which employment has fallen and unemployment has risen. Although these developments are concerning there are signs that suggest that they may be more of blip than a trend. Looking at the changes in just the last month employment rose by 53,000 and unemployment fell very slightly by less than 1,000. In addition, as this month’s Bank of England Inflation Report notes, survey indicators of employment intentions remain strong. Hence perhaps the most likely outturn for the next few months is the return of an improving labour market albeit with employment rising and unemployment falling more slowly than was seen in the two to three years to early 2015."

Inclusion Comment

KEY FACTS

  • Unemployment is 1,852,000, down 1,000 from last month’s published figure (quarterly headline up 25,000) and the unemployment rate is 5.6%, no change on last month and down 0.1 percentage points on last quarter.
  • The number of claimant unemployed is 792,400, down -4,900 on last month, and the claimant rate is 2.3%.
  • The number of workless young people (not in employment, full-time education or training) is 1,072,000, down -51,000 on the quarter, representing 14.8% of the youth population (down -0.7 percentage points).
  • Youth unemployment (including students) is 738,000, up 3,000 on the quarter.
  • There are 2.5 unemployed people per vacancy. Inclusion estimates this figure may rise slightly next month.
  • The employment rate is 73.4% (up 0.1 percentage points on last month’s published figure and down 0.1 percentage points in the preferred quarterly measure).

The labour market figures published on 12 August show another concerning fall in employment and rise in unemployment for April to June 2015 compared to the three months previously.

Employment fell by 63,000 between April to June 2015 and January to March 2015. The fall in employment was concentrated amongst those aged 65 and over where employment fell by 56,000. In the last 12 months employment has grown by 354,000.

Unemployment rose by 25,000 between April to June 2015 and January to March 2015 and the unemployment rate increased slightly in the quarter to 5.6% and remains above its pre-recession levels.

Headline claimant count figures now include Universal Credit workless claimants. However, local level claimant figures including Universal Credit are not published as part of the regular release schedule. The available figures are JSA only. The fall 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 10,000 between June and July , compared to the adjusted JSA only fall of 18,100. Therefore, it should not be surprising that figures for local areas will show larger falls compared to the national picture.

The proportion of people leaving the claimant count (or the ‘leavers rate’) has fallen sharply. At 18.7%, it is now well below the pre-recession level of 21.2%. The number of new claims has fallen . Off-flow rates for JSAclaimants of most durations reduced, except for increases for the shortest and longest-term group we analyse. Even so, off-flow rates remain at around historically high levels. Youth unemployment is showing a quarterly fall. There are still 738,000 unemployed young people, and 475,000 (6.6% 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 66% and has risen by over 30 percentage points since October 2012.

A total of 104,000 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 is up by 1,000 this quarter. Self-employment rose 8,000 this quarter and remains at a historically high proportion of employment. Employee numbers fell 54,000 in the quarter. Involuntary part-time employment fell this quarter by 32,000 to 1.29 million, 15.8% of all part-time workers. The proportion remains more than double that in 2004.

The Centre for Economic and Social Inclusion is the UK’s leading not-for-profit company dedicated to tackling disadvantage and promoting social inclusion in the labour market. 

 


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