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Labour Market Report #32

In this issue

- Employment up 40,000

- Unemployment down 82,000

- No decline in long-term unemployment (1 yr +)

- Wages continue to fall in real terms

Employment and unemployment

The most recent labour market statistics cover the three months from August to October 2012, and most comparisons are with the data from May to July 2012. There are 29.60 million people in employment. This increased by 40,000 on the quarter, and the employment rate rose by 0.1% to 71.2% over the same period.

Unemployment on the International Labour Organisation measure fell by 82,000 on the quarter to 2.51 million, the unemployment rate fell by 0.2% to 7.8%. The latest claimant count figures showed a fall of 3,000 from October 2012, and the claimant count for November 2012 stands at 1.58 million. The claimant count rate however remains unchanged at 4.8%.

Youth unemployment fell by 72,000 to 945,000.

Long-term unemployment classified as six months and over fell by 62,000, this fall however was restricted to the over six and up to twelve months group. When looking at this by age (see chart), the fall in unemployment for over six months was largely confined to young people.

Unemployment of over twelve months continues to remain high, 904,000 people have been unemployed for over one year, unchanged from May to July and 449,000 have been unemployed for over two years, up 6,000 in the same period.

Over one in three (35.8 per cent) people currently unemployed have been out of work for at least a year, the highest proportion since May 1997.

While it is clear the improvement in employment and unemployment has continued the less encouraging news is that the increase in employment was just 40,000 in 3 months. This is the smallest quarterly increase in the number of people in employment since the increase of 39,000 between August-October 2011 and November 2011-January 2012. As the chart below shows, the increase in employment in the first half of the year tailed off in the summer.

There is still a great deal of ground to be made up. If unemployment continues to fall by 128,000 a year we would only return to the pre-recession level of 1.6m in 2019.

Redundancies and vacancies

In the latest figures, the number of redundancies rose by 5,000 to 147,000. Vacancies rose by 8,000 to 489,000. The number of unemployed people per job vacancy fell to 5.2, down from 5.4 in the previous quarter, and 5.7 in August - October 2011.

However, TUC analysis of employment blackspots continues to show high ratios of claimants chasing vacancies. Seven of the areas are in London and in double figures. The full analysis of local authorities shows that over a third of areas have ratios above the national average of 5.2.

'Atypical' employment

The August to October 2012 figures show:

Regional variations

The latest regional data shows that there was a fall in the unemployment rate in most regions, the exceptions being London, the South West and the East of England. There was no change in the South East.

TUC analysis of official unemployment figures shows that mass long-term unemployment - where a local area has over 1,000 people claiming JSA for at least a year, is no longer limited to a few employment blackspots. Last month, 149 of the 232 local authority areas across the UK had at least 1,000 long-term dole claimants; in London this was the position in 27 of the 33 boroughs.

Number claiming JSA over 12 months by Region

Earnings growth and pay settlements

Regular pay (excluding bonuses) rose by 1.7% in the latest data. The annual growth rate for earnings was lower than the increase of 2.7% in the CPI between October 2011 and October 2012, meaning that real wages continue to fall.

Newsletter (700 words) issued 20 Dec 2012