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Labour Market Statistics

November 2008

UK labour market analysis, November 2008

1. This briefing comprises an analysis of ONS labour market data covering the period July - September 2008.

Overall unemployment

2. At the end of September this year 1,825,000 people in the UK were unemployed. [1] The national unemployment rate is 5.8 per cent (an increase of 0.4 per cent on the rate for the three months to August 2008).[2] Over the year to date there has been an 11.1 per cent increase in the number of people who are unemployed.

3. The quarterly increase in the unemployment rate has been similar for women (0.4 per cent quarterly increase) and men (0.5 per cent quarterly increase).

4. The increase in the numbers of people unemployed was slightly less than the previous quarterly rise (8.3 per cent compared to 10.1 per cent). However, the overall rate of increase remains steep in relation to recent years.

5. In October 2008 the claimant count[3] was 980,900, an increase of 36,500 people claiming unemployment benefit from the previous month. This is a monthly increase of 3.9 per cent (up from a previous increase of 3.5 per cent between August-September 2008). The rate of increase in the claimant count is therefore greater than in the previous quarter. The annual increase in the claimant count is now 18.7 per cent. There has also been a monthly fall in the number of claimants leaving benefits for work.

Long-term unemployment

6. There have been significant increases in long-term unemployment, with quarterly increases in the number of workers unemployed for up to 6 months (11.2 per cent increase; 1,106,000 workers) from over 6 to up to 12 months (3.1 per cent increase; 284,000 workers) over 12 months (4.8 per cent increase; 435,000 workers) and over 24 months (4.6 per cent increase; 202,000 workers).

7. The numbers of young people aged 18-24 unemployed for up to 6 months, and for over 6 and up to 12 months are rising more sharply than for the general population of working people. There was a 12.8 per cent quarterly increase in the number of young people unemployed for up to 6 months (390,000 young workers), and a 6 per cent increase in the number of young people unemployed for 6-12 months (80,000 young workers).

8. The quarterly increase in unemployment of up to 6 months has been greater for young men (14.8 per cent quarterly increase, compared to 9.9 per cent quarterly increase for young women), but the increase in unemployment for between 6-12 months has been much greater for young women (10.7 per cent compared to 3.7 per cent for young men).

9. Unemployment of over 12 months is not yet showing large quarterly increases for young people. For young people aged 18-24 there was a 3.6 per cent quarterly increase in unemployment of over 12 months, and 1.6 per cent in unemployment of over 24 months. These rates are below the national average increases, but may rise in coming months, if those currently unemployed do not find work.

10. 544,000 young people aged under 25 are now not in education, employment or training (NEET). This is an increase of 0.8 per cent on the previous quarter. The quarterly rate of increase is greater for young men (1.1 per cent) than for young women (0.4 per cent).

11. For 25-49 year olds the quarterly rate of increase in unemployment of up to six months was slightly above the national average (13.2 per cent). While there was a fall in unemployment of over 6 and up to 12 months (a quarterly fall of 1.9 per cent). Unemployment of over 12 months increased for this group by 9.6 per cent, and unemployment of over 24 months rose by 11.1 per cent. This suggests signs of retrenched long-term unemployment among workers who have spent significant periods of time outside of the labour market.

12. There are also signs of likely increases in long-term unemployment among older workers, with a quarterly increase of 29.7 per cent in the number of workers over 50 who are unemployed for over 6 months and up to 12 months. There was also a 4.5 per cent decline in unemployment of over 12 moths among over 50s, which could indicate that people are choosing to leave the labour market rather than continuing to seek work.

Regional unemployment

13. The unemployment rate is above the UK average (5.8 per cent) in the North East (8 per cent); the North West (6.8 per cent); Yorkshire and the Humber (6.8 per cent); East Midlands (5.9 per cent); West Midlands (6.5 per cent); London (7.4 per cent) and Wales (6.7 per cent). It is below the national average in the Eastern region (4.8 per cent), South East (4.6 per cent), South West (4.2 per cent), Scotland (4.7 per cent) and Northern Ireland (4.1 per cent).

14. The quarterly increase in the unemployment rate has been above the UK average (0.4 per cent) in the North East (0.5 per cent), the North West (0.5 per cent), Yorkshire and the Humber (0.8 per cent), Wales (1.7 per cent) and Scotland (0.5 per cent). The increase has been the same as the national rate in London, the South East and the South West, and below the average in the East Midlands (0.2 per cent), West Midlands (0.2 per cent) and Eastern region (0.2 per cent). In Northern Ireland, the unemployment rate declined by 0.1 per cent.

Employment

15. The national employment rate is 74.4 per cent, and in the three months to December 29,407,000 people were in work.

16. There has been a 0.3 per cent reduction in the number of working adults over the quarter. The rate of decline is higher for temporary work - there has been a 2.5 per cent quarterly decline in the number of temporary employees. There has been a small quarterly increase in part-time work (0.1 per cent), which is a consequence of increased rates of male part-time employment (a quarterly increase of 1.6 per cent compared to a decrease of 0.4 per cent for women). During the quarter there has also been an increase (3.6 per cent) in the number of people who are in part-time work because they cannot find full-time work. This increase is a result of more working men being unable to find full-time jobs (a quarterly increase of 12 per cent compared to a decrease of 2.2 per cent of women).

17. The number of vacancies continues to fall, with a quarterly fall of 6.3 per cent in vacancy numbers. Redundancy figures continue to rise. There has been a 22.6 per cent quarterly increase in the number of redundancies, with 156,000 posts being made redundant during the quarter to September 2008.

[1] The number of unemployed people in the UK is measured through the Labour Force Survey following the internationally agreed definition recommended by the International Labour Organisation (ILO). Unemployed people are therefore defined as those who are without a job, but want a job and have actively sought work in the last four weeks and are available to start work in the next two weeks or; those who are out of work but have found a job and are waiting to start in the next two weeks.

[2] When only those of under retirement age are considered the unemployment rate rises to 6 per cent.

[3] The claimant count is the number of people claiming unemployment related benefits.

Briefing document (1,300 words) issued 12 Nov 2008