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Labour Market Report

In this issue

• Employment up (105,000) and unemployment down (45,000).
• Increase in part-time jobs (+118,000) hides fall in full-time (-13,000).
• Substantial increases in involuntary part-time work since 2007, especially for women.
• Real wages continued to fall (by 3 per cent).

Employment and unemployment

The latest labour market figures cover the three months from January to March, and most comparisons are with the figures for October to December. Employment rose by 105,000 on the quarter to 29.23 million and the employment rate increased 0.2 points to 70.5 per cent.

Unemployment, on the broad International Labour Organization measure, fell by 45,000 to 2.63 million and the unemployment rate fell 0.2 points to 8.2 per cent.

The latest claimant count figure for people claiming Jobseeker's Allowance is for April. It stood at 1,590,300 - down 13,700 from the March figure.

The employment and unemployment changes were better for men than for women. While the number of unemployed men fell by 42,000, for women the fall was just 3,000. While the number of men in employment rose by 80,000, the equivalent increase for women was just 24,000.

The number of people unemployed over 12 months rose 27,000 to 887,000 - the highest figure since Jul - Sep 1996. The number of men unemployed for this long rose by 1,000, while the number of women rose by 26,000.

The number of women unemployed over 12 months is now the highest since Sep - Nov 1993. 37 per cent of unemployed men have been unemployed over 12 months, for women the equivalent figure is 29.4 per cent (the highest since Jul - Sep 1995).

The number of young unemployed people fell by 13,000, but, at 1,020,000, it was over the one million mark for the 7^th month running. There were 264,000 young people who had been unemployed over 12 months, the highest figure since Nov - Jan 1993. This was the third month running when this figure was over a quarter of a million.

Part-time and other 'atypical' employment

While the overall labour market figures were positive, the increase in employment, and the corresponding fall in unemployment, was entirely driven by part-time work: the number of people in full-time work fell by 13,000.

This trend has been noticeable over the past 6 months. Since August, total employment has risen 165k, but full-time employment has fallen 24k. 69 per cent of the extra part-time jobs have been taken by people who would have preferred a full-time job and only 31 per cent by people who did not want a full-time job.

In the latest figures, the number of people working part-time who said they could not find full-time work rose by 73,000 to a record high of 1,418,000. At the same time, the number on temporary contracts who wanted a permanent position rose by 14,000 to 616,000, bringing the total number 'under- employed' to more than two million.

A TUC analysis showed that, between December 2007 and 2011, the number of men doing part-time jobs because they could not find full-time work more than doubled to nearly 600,000. The number of involuntary part time women increased by 74% to 780,000, complementing a decrease in the number of women working part-time who do not want full-time jobs:

Regional variations

There were improvements in the unemployment rate in some regions but areas with previously high unemployment rates saw a further increase in unemployment or no improvement.

Redundancies and vacancies

In Jan - Mar there were 172,000 redundancies, up 7,000 from Oct - Dec and 49,000 from Jan - Mar 2011. The redundancy rates (number of redundancies per thousand employees) rose 0.3 to 6.9.

Provisional vacancy figures for Jan - Mar are 459,000, down 2,000 over the quarter and 17,000 lower than 12 months ago. The number of unemployed people per job vacancy now stands at 5.7 down from 5.8. There has been no real improvement in the level of vacancies since the start of 2011:

Earnings growth and pay settlements

Normally, strong labour market figures, with falling unemployment and rising employment would be expected to translate into rising real wages. The opposite has happened - total pay rose by 0.6 per cent on 12 months earlier, down from an annual rate of 1.1 per cent in the previous month.

As the chart below makes clear, the large fall in inflation since it peaked in the autumn has not relieved the pressure on real wages. Real wage falls slowed towards the end of 2011 but have reaccelerated since January 2012.

Briefing document (800 words) issued 24 May 2012