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Labour Market Report

Number 7, September 2010

Introduction

This is the latest edition of the TUC's brief report on the state of the labour market, using the latest data from the Office for National Statistics. The figures cover the early summer and there is good news on employment and redundancies, but there are also indications of underlying weakness.

Employment

There were 29,158,000 people in employment in the latest figures. This is 135,000 higher than last month's figure and 286,000 higher than the figure for the previous quarter. This was another record increase and the quarterly rise was entirely due to private sector employment rising by 308,000 - public sector employment fell by 22,000.

Part of the increase on the quarter was due to a 166,000 rise in part-time employment, but full-time employment also rose, by 121,000. There was also a 74,000 increase in temporary employment.

Less positive was a significant increase in involuntary part-time and temporary employment. Compared with the previous quarter, the number of people who said they were doing a temporary or part-time job because they could not find a permanent or full-time alternative and the proportion doing both types of work involuntarily rose:

At the same time as the monthly labour market statistics the Office for National Statistics published an analysis of personal characteristics that are associated with a greater risk of unemployment and a likelihood of being unemployed for a longer period.

The study found that people working in elementary occupations (such as labourers, waiters and cleaners), members of minority ethnic groups, 18 to 24-year-olds and social housing tenants all have a greater likelihood of becoming unemployed.

It also found that men are 3.2 percentage points more likely than women to be or become unemployed whilst they are part of the Labour Force Survey sample. On the other hand, men's unemployment is likely to be briefer - they can expect their period of unemployment, on average, to be 1.6 months shorter.

The Labour Force Survey data show that employment rates for men and women have changed in the course of the recession, with men's rates falling further in the initial phase, but rising more in the past few months:

Unemployment

• In May - July 2010 ILO unemployment was 2,467,000. This was 8,000 lower than the February - April figure (the previous 3-month period) and the unemployment rate was down slightly (by 0.1 percentage points).
• The 'claimant count', on the other hand, rose for a second month. 1,466,300 people claimed JSA in August - 2,300 more than in July.
• The number of redundancies has fallen significantly. In May - July there were 142,000 redundancies; this is10,000 fewer than in last month's figures and 91,000 fewer than in May to July 2009. The redundancy rate (the number of redundancies per thousand workers) is down from 9.3 a year ago to 5.8 in now.
• The number of vacancies is down slightly from last month (but up on the last 3-month period). There are now 481,000 vacancies, comopared with 429,000 a year ago and the number of unemployed people per vacancy has come down from 5.8 to 5.1.

Short-term unemployment (under 6 months) rose by 27,000 to 1.186m, while unemployment of longer durations fell by 17,000. The normal pattern is for short-term unemployment to start falling while medium term and long-term unemployment are still rising, then for medium term unemployment to fall - and this is indeed what has been happening so far:

It is important not to read too much into one month's figures, but an increase in short-term unemployment is not what might be expected when the labour market is recovering.

Youth unemployment

There were 187,000 unemployed 16-17 year olds in the most recent figures, down 9,000 on the month and 24,000 on the quarter. Significantly, the latest figure is 30,000 below the level in May - July 2009.

18 - 24 unemployment, on the other hand, is rising; it is up 4,000 on the month and 16,000 on the quarter. The current level of 728,000 is 2,000 higher than the May - July 2009 figure.

Pay

Average weekly earnings rose 1.5 per cent in the year to July (whole economy, total pay). The increase for the private sector was 1.2 per cent and the public sector was 1.4 per cent if we exclude financial services.

The latest Pay Report from Income Data Services found that the median for settlements in the three months to the end of July was steady at 2.0 per cent, with the proportion of freezes falling to under 15 per cent of deals. Thirty per cent of settlements were at or above 3 per cent.

Report (800 words) issued 23 Sep 2010