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Labour Market Report #28

In this issue

• Employment up (201,000) and unemployment down (46,000).
• In the past year, men have gained significantly more than women from rising employment.
• Increases in earnings continue to lag inflation.

Employment and unemployment

The latest labour market figures cover the three months from April to June, and most comparisons are with the figures for January to March. Employment rose by 201,000 on the quarter to 29.48 million and the employment rate increased 0.4 points to 71.0 per cent.

Unemployment, using the International Labour Organization definition, fell by 46,000 to 2.56 million and the unemployment rate fell 0.2 points to 8.0 per cent. The latest claimant count figure for people claiming Jobseeker's Allowance is for July. It stood at 1,593,200 - down 5,900 from the June figure.

The number of people unemployed over 12 months was essentially unchanged, rising 1,000 to 882,000.

The number of young unemployed people fell by 4,000, but, at 1,012,000, it was still over one million. There were 265,000 young people who had been unemployed over 12 months, the sixth successive month in which over a quarter of a million young people had been unemployed that long.

There were 1,436,000 young people not in full-time education or training who were not in employment either - 19.7 per cent of all under 25s. This was an increase of 24,000 from the previous quarter.

Estimates based on a sample are not exact, they are likely to be correct within a certain range either side of the given figure. The Office for National Statistics estimated this 'sampling variability' for the increase in employment to be up to 157,000 either side of the headline figure of 201,000. The rise in employment was in a range from 44,000 to 358,000, so even in the worst case scenario there was a real increase.

By contrast, the estimate for the fall in unemployment was up to 81,000 more or less than the 46,000 headline. The range was therefore from a 127,000 fall to a 35,000 increase.

Men and women's employment and unemployment

At the start of the recession, men had higher employment and unemployment rates than women:

At first the recession hit men harder than women:

But while the increase in men's unemployment levelled off after a year, it continued for women, though at a slower rate. In the past year, women have gained less than men from the improved labour market performance. The increase in men's employment has been nearly double that of women, whilst women have seen a much larger rise in unemployment:

'Atypical' employment

All types of employment rose in the past quarter:

• Employees by 128,000
• Self-employed by 39,000
• Full-time workers by 130,000
• Part-time workers by 71,000.

But this is a recent development - the growth in employment over the past 12 months includes a 218,000 increase in self-employment that disguises a 33,000 fall in the number of employees. Over this period, the number of part-time workers has grown by 174,000, dwarfing the 77,000 increase in full-time employment.

Regional variations

The rise in employment and fall in unemployment have not been uniform across the country. UK employment rose 201,000 on the quarter, but two regions (London and the North West) accounted for 84 per cent of that increase.

UK unemployment fell 46,000, but London's 42,000 fall accounted for a large proportion of that figure.

Vacancies

The number of unemployed people per job vacancy now stands at (5.4) down from the previous quarter (5.7), and the Oct- Dec 2011 quarter (5.8). TUC analysis of employment black spots, however, shows that there are at least 15 people chasing every vacancy in the top 10 employment black spots:

Earnings growth and pay settlements

Annual inflation in the latest figures stood at 3.2 per cent, as measured by the Retail Prices Index, or 2.6 using the Consumer Price Index. In the employment statistics, the annual rate of increase for average weekly earnings (regular pay) was 1.8 per cent - a substantial real terms pay cut.

According to Incomes Data Services, pay settlements in the second quarter of 2012 averaged 3 per cent in the private sector; zero in the public sector. The Labour Research Department figures for the 3 months to July also show a 3.0 per cent median for the private sector, but 1.6 per cent for the private sector.

Briefing document (800 words) issued 16 Aug 2012