The Office for National Statistics published the monthly Labour Market Statistics First Release this morning, which includes Labour Force Survey data for the period May to July 2012 and Jobseekers’ Allowance (JSA) data for August. According to LFS estimates, employment has increased on the previous quarter and unemployment has fallen slightly, whilst the more timely measure of claimant count unemployment also shows a decrease. However, a regional break-down of this data strongly suggests that this relates to the effects of the London Olympics. London accounted for the majority of the increase in employment. The number of employed residents has fallen in other regions – including the East Midlands.
In London, the number of resident adults in employment increased by 91,000 on the previous quarter (February to April 2012), 44% of the total increase estimated for England as a whole. Similarly, 22,000 fewer residents in London were estimated to be unemployed compared to the previous quarter. The total fall in unemployment in England was also 22,000, which indicates that London balanced out increases in unemployment in a number of other regions. Unemployment in Yorkshire and the Humber and the East and West Midlands increased by 23,000, 5,000 and 16,000 respectively over the same period.
The latest estimates also indicate that part-time employment is now at the highest level since records began (in 1992), and the proportion of adults working part-time because they cannot find a full-time job remains at the highest level since comparable records began (also 1992). As a further indicator of the continuing weakness of the labour market, the number of people who have been unemployed for more than one year has now reached its highest level since the three months to May 1996.
Unemployment and Employment Rates
LFS data for the three months to July 2012 indicate that the unemployment rate has fallen slightly by 0.1 percentage points on the previous quarter, to 8.1% of the economically active population, which is equivalent to 2.59 million individuals. This is 7,000 lower than the previous quarter, but up 61,000 on the same period a year earlier. Long-term unemployment continues to increase, with the number of people out of work for more than a year up to 904,000 (up 22,000 from the previous quarter), which is the highest level since the three months to May 1996.
The employment rate (for adults aged 16-64) increased by 0.5 percentage points on the previous quarter, to 71.2%, the highest figure since the three months to April 2009. The total number of people estimated to be in employment is now 29.6 million, up 236,000 on the previous quarter. Both full-time and part-time employment increased, by 102,000 and 134,000 respectively, with the number of part-time workers reaching its highest level since comparable records began in 1992. Furthermore, the number of employees and self-employees working part-time because they have been unable to find a full-time job remains at the highest level since comparable records began (also in 1992).
Earnings estimates continue to point to very weak growth in average pay levels, with regular pay (excluding bonuses), rising by only 1.9% between the three months to July 2012 and the same period a year earlier. Total pay (including bonuses) increased by 1.5% - down 0.3 percentage points from the earnings growth estimates for the three months to June.
Job Seekers’ Allowance Claimants
Jobseekers’ Allowance (JSA) claimants in August 2012 fell by 15,000 on the previous month, to reach 1.57 million. The claimant count rate was 4.8%, unchanged from the previous month. However, data from regional Jobcentre Plus offices demonstrates that much of this decrease can be attributed to London, which is likely to be associated with the Olympics. Claimant count unemployment in London was down by 5,500, 37% of the total decrease in Jobseekers’ Allowance claimants across the UK. The next largest decrease was 2,200 in the North West.
Redundancies and Vacancies
In the three months to July 2012, 142,000 people had become redundant, down 13,000 from the previous quarter and down 2,000 from the same period a year earlier.
The number of vacancies (advertised through Jobcentre Plus) in the three months to August 2012 was 473,000 up 5,000 compared to the previous quarter and up 14,000 on the same period a year earlier. The number of ILO unemployed adults to every one vacancy has fallen to 5.5, compared to 5.6 in the previous quarter.
Key Regional Developments
- As mentioned above, London is an outlier in the current data release, which is very likely to be associated with additional jobs created through the Olympics, many of which may be part-time or temporary. According to the latest LFS estimates, the number employed in London increased by 91,000 between the periods February to April 2012 and May to July 2012, whilst the number unemployed fell by 22,000 (equal to the fall in England overall).
- The North East, North West, East of England, South East and South West experienced much smaller decreases in unemployment levels. However, unemployment increased in Yorkshire and the Humber (by 23,000), the East Midlands (by 5,000) and the West Midlands (by 16,000).
- In the East Midlands, employment fell slightly on the quarter, by 10,000 (or 0.3 percentage points). Compared to the same period a year earlier, however, the decrease in employment is more significant – at 26,000. The East Midlands is the only English region to have experienced a fall in employment in May to July 2012 when compared to May to July 2011. The regional employment rate is currently estimated to be 71.7%, which exceeds the UK average (71.2%), but the unemployment rate, at 8.3%, also exceeds the UK average (8.1%), as it did in last month’s First Release. Historically, the East Midlands has maintained lower than average unemployment rates.
 According to the International Labour Organisation (ILO), this is defined as those who are out of work but available for, and actively looking for, employment within a set period. This is expressed as the proportion of ‘economically active’ (employed plus unemployed) adults.