National Data

July 2016

Key Facts

  • Unemployment is 1,646,000, down 25,000 from last month’s published figure (quarterly headline down 54,000) and the unemployment rate is 4.9%, down 0.1 percentage points on last month and down 0.2 percentage points on last quarter.
  • The number of claimant unemployed is 759,116, up 418 on last month, and the claimant rate is 2.2%.
  • The number of workless young people (not in employment, full-time education or training) is 1,013,000, down 27,000 on the quarter, representing 14.0% of the youth population (down 0.3 percentage points).
  • Youth unemployment (including students) is 617,000, down 13,000 on the quarter.
  • There are 2.2 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise next month.
  • The employment rate is 74.4% (up 0.2 percentage points on last month’s published figure and up 0.3 percentage points in the preferred quarterly measure).

Learning and Work Institute comment

The labour market figures published on 20 July July are a surprisingly positive set of numbers in the context of pre-EU referendum vote uncertainty, with employment rising substantially and unemployment falling.

Duncan Melville, Chief Economist at Learning and Work Institute, commented:

"Employment rose by over 150,000 in the three months to March to May 2016. This is a much larger increase than we have seen in recent months. Unemployment fell by over 50,000 in the same period. The unemployment rate is below 5 percent for the first time in over a decade. In contrast with recent months, these figures show no signs of pre-EU referendum uncertainty delaying hiring decisions by employers. Average weekly earnings growth remains stable at 2.2 per cent. These are a great set of numbers for Damian Green to contemplate as he settles into his new role as Secretary of State for the Department for Work and Pensions. The only fly in the ointment is that the claimant count (UC + JSA) has remained over 30,000 higher than the February 2016 trough for two months now.

It is important to remember that today's figures relate to March to May 2016, before the EU referendum vote on 23 June. The outlook for the labour market in the wake of the vote to leave the EU is less sanguine. Already, vacancies in the economy have plateaued at just under 750,000 a lower level than that seen in early 2016. The economic uncertainty generated by Brexit is likely to lead to reductions in business investment and consumer spending. In consequence, economic growth is expected to weaken and unemployment to rise. The IMF have already reduced their growth outlook for the UK, particularly for 2017. Our own initial analysis suggests that unemployment could increase by up to 400,000 to 450,000 by the end of 2017. Today has also seen the release of the July edition of the Treasury's survey of independent forecasters. The consensus view that emerges is for the unemployment rate to reach 5.7% by the end of 2017. This implies an increase in unemployment from current levels of around 260,000.

This increase in unemployment is not inevitable and can be addressed. As we argued yesterday, prompt and well-designed 'active labour market policies' can reduce unemployment, and we urge significant action in this regard to be taken in this year's Autumn Statement."

Employment rose by 176,000 between December 2015 to February 2016 and March to May 2016. In the last 12 months employment has grown by 624,000.

Unemployment fell by 54,000 between December 2015 to February 2016 and March to May 2016 and the unemployment rate fell 0.2 percentage points to 4.9% in the quarter the lowest level since 2005.

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, fell by 23,700 between May and June, compared to the adjusted rise of 400. Therefore, it should not be surprising that figures for local areas will show falls compared to the national picture.

The proportion of people leaving the claimant count (or the ‘leavers rate’) has fallen. At 17.8%, it is now well below the level in early 2015 of 20.7%. The number of new claims has fallen. Jobseeker’s Allowance off-flow rates for JSA claimants of most durations increased marginally. Off-flow rates remain at historically high levels but are well below early 2015 levels.

Youth unemployment is showing a quarterly fall. There are still 617,000 unemployed young people, and 402,000 (5.6% 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 60.7% and has risen by more than 30 percentage points since October 2012.

A total of 94,000 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 fell 7,000 this quarter. Self-employment rose 119,000 this quarter and reached a new record proportion of employment. Employee numbers rose 49,000 in the quarter. Involuntary part-time employment fell this quarter by 1,000 to 1.2 million, 14.2% of all part-time workers.The proportion remains nearly double that in 2004.

Chart1 july2016 0

Chart 1: UK unemployment (ILO)

The latest unemployment figure is 1,646,000. It has fallen by 25,000 from the figure published last month. On the basis of later claimant count figures, Learning and Work Institute estimates that unemployment may rise, although this remains highly uncertain. The unemployment rate fell to 4.9%.

Chart2 july2016

Chart 2: Percentage unemployed not claiming Jobseeker’s Allowance

The proportion of unemployed people not claiming Jobseeker’s Allowance has fallen to 54.6%; (899,000). The number and proportion of unemployed people not claiming Jobseeker’s Allowance had risen since the new Jobseeker’s Allowance sanctions regime started in October 2012.

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Chart 3: Youth long-term unemployment (six months and over, 18-24)

Youth long-term unemployment (which can include students) has fallen by 5,000 from last month’s figure and is now 165,000.