January 2013 Labour Market Statistics Briefing

This morning, the Office for National Statistics published the monthly Labour Market Statistics for January 2013, which covers Labour Force Survey data for the period September to November 2012 and Jobseekers’ Allowance (JSA) claimant data for December 2012.  A very slight increase in employment and a small decrease in unemployment point to a flatter trend than earlier in 2012.  Increases in employment reported in previous months have been significantly greater.  On balance, the labour market between September to November 2012 and the previous quarter could be described as broadly flat, with a few interesting exceptions.  

In contrast to earlier in 2012, when part-time jobs were largely responsible for the net increases in employment, the latest data indicates a stronger increase in full-time employment compensating for a small fall in part-time employment.  

In previous briefings, we have also drawn attention to falling labour productivity (output per worker) and increasing labour costs – together supporting the view that employers were ‘hoarding’ excess labour, a strategy that may become unsustainable in the future if demand does not increase.  However, the latest data indicates a slight increase in output per worker and a slight fall in labour costs.  These estimates (for Quarter 3 of 2012) coincide with a period of overall output growth (with Q3 GDP growth estimated to be 0.9%).  Various survey evidence published recently, such as data from the Purchasing Managers’ Index published just before Christmas, indicate a significant fall in service sector activity at the end of 2012, strongly suggesting that the final quarter of the year could see a return to negative growth – meaning that the slight increase in output per worker and fall in labour costs could be short-lived

Weak earnings growth has been observed through most of 2012, with previous data releases indicating below inflation rates of earnings growth.  The latest data is consistent with this, indicating that regular pay (excluding bonuses) rose by only 1.4% between September-November 2012 and the same period a year earlier, compared to the latest CPI inflation estimate of  2.7%.

Media coverage of today’s data has generally been positive, with the BBC drawing attention to continued falls in Jobseekers’ Allowance claimants, to reach the lowest level since June 2011, alongside falls in long-term unemployment on the Labour Force Survey measure.  However, a slight increase in youth unemployment has also been picked up in the press coverage – notable given the rate and number of 16-24 year olds classed as unemployed had previously been falling since early 2012.

Unemployment and Employment Rates

LFS data for the three months to November 2012 indicate that the unemployment rate[1]  has fallen by 0.1 percentage points on the previous quarter, to 7.7% of the economically active population, which is equivalent to 2.49 million individuals.  This is 37,000 lower than the previous quarter and 185,000 lower than the same period a year earlier.   However, the number of young people (16-24 year olds) who are unemployed increased very slightly, by 1,000 on the previous quarter, to reach 957,000 (20.5% of the economically active population in that age band).

Long-term unemployment (adults unemployed for more than one year) fell by 5,000 compared to the previous quarter, to a total of 892,000 individuals across the UK.

The employment rate (for adults aged 16-64) increased slightly, by 0.1 percentage points on the previous quarter, to 71.4%.  The total number of people estimated to be in employment is 29.68 million, up 90,000 on the previous quarter.   The employment rate is 1.1 percentage points higher than the same period a year earlier, although it remains lower than its pre-recession peak of 73% (March-May 2008).

Full-time employment increased by 113,000 on the previous quarter whilst the number of people in part-time employment fell by 23,000.  However, despite this recent fall, over the year there has been a strong increase in part-time employment, with 95,000 more men and 144,000 more women working part time in September to November 2012 compared to the same period in 2011.

Earnings Estimates

Earnings estimates continue to point to weak growth in average pay levels, with regular pay (excluding bonuses), rising by only 1.4% between August to October 2011 and August to October 2012, whilst total pay (including bonuses) increased by 1.5% over the same period.  This increase is lower than that reported in previous months (for example, the November 2012 Labour Market Statistics estimated a 1.9% increase in regular pay), suggesting that although employment continues to rise, UK workers also continue to experience reductions in real-terms pay (with the rate of inflation currently estimated to be 2.7% on the CPI measure).

Labour Productivity and Unit Labour Costs

In contrast with previous data releases, the amount of (inflation adjusted) output per worker increased slightly, by 0.6%, between the second and third quarters of 2012.  This coincided with the period in which the overall output of the UK economy was estimated to grow by 0.9%.  Conversely, unit labour costs are estimated to have  fallen very slightly over the same period, by 0.1%.

Job Seekers’ Allowance Claimants

The number of Jobseekers’ Allowance (JSA) claimants in December 2012 fell slightly on the previous month, by 12,100 across the UK, whilst the rate remained unchanged from previous months, at 4.8%.

Redundancies and Vacancies

In the three months to November 2012, 158,000 people were made redundant, up 27,000 from the previous quarter but down 6,000 from the same period a year earlier.

The number of vacancies (advertised through Jobcentre Plus) in the three months to December 2012 was 494,000 -  up 10,000 compared to the previous quarter and up 33,000 on the same period a year earlier.  The number of ILO unemployed adults to every one vacancy in the three months to November 2012 has fallen to 5.1, compared to 5.3 in the previous quarter.

Key Regional Developments

•        The level of unemployment fell compared to the previous quarter in the North East, Yorkshire and the Humber, London and the South West – most significantly in London, by 26,000 and 0.6 percentage points, and the North East, by 10,000 and 0.8 percentage points.  However, the North East continues to have the highest unemployment rate of the nine English regions, at 9.1%, followed by the West Midlands, at 8.9%.
•       Unemployment levels increased in the North West, the East Midlands, the West Midlands, the East of England, and the South East – most significantly in the East Midlands, by 10,000 individuals and 0.4 percentage points, and the West Midlands, by 13,000 individuals and 0.3 percentage points.
•       In the East Midlands, employment also fell slightly on the previous quarter, by 3,000 individuals or 0.5 percentage points.  The overall employment rate in the East Midlands for the period September to November 2012 was level with the UK average, at 71.4%, whilst the unemployment rate was higher, at 8.2% compared to 7.7%.   With the exception of London (with an unemployment rate of 8.3%), the latest data indicates a very clear north-south divide, with the five Midlands and Northern regions all having unemployment rates in excess of 8%, whilst the East of England, the South West and South East all have unemployment rates below 7%.

---

[1] 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.

2012: UK Economic and Labour Market Overview

This post briefly summarises the main developments affecting the UK economy and labour market through 2012, drawing from a range of official data published over the last 12 months. 

The last year has been another difficult year for the UK.  A combination of weak conditions in the global economy, and in the eurozone in particular, and weak domestic expenditure mean that growth in the UK has been flat during the last year.

The global economy has weakened during the past year.  In its recent Economic Outlook, the OECD suggests that growth has fallen in the major emerging countries of Brazil, India and China in 2012.  Growth has increased slightly in the United States while the EU has contracted.   The OECD expects the EU to continue to act as a drag on global growth in 2013[1].  Within the EU the slowdown in growth in the peripheral economies has started to spread to the core, with sharp declines in growth expected in the major eurozone economies of Germany and France this year.  The crisis in the eurozone has yet to be fully resolved and this remains the key risk to the global economy.  However there are concerns that failure to agree a programme of fiscal consolidation in the USA (the so-called “fiscal cliff”) could also have a major impact on the prospects for the global economy in 2013. 

Domestically, the UK entered recession in the final quarter of 2011, and growth contracted until the third quarter of 2012.  Changes in GDP on a quarter-by-quarter basis have been particularly hard to interpret during the past year as a result of a number of one-off events such as the Olympic Games and the Diamond Jubilee.  However it is the case that in the third quarter of 2012 GDP was unchanged from a year earlier[2].  Over the course of the year growth in service sector activity has been offset by declines in production and construction.  Despite some positives in the labour market and a decline in inflation during the year, earnings growth remain weak, dampening consumer expenditure.

There has been much debate throughout the year over the ‘puzzle’ of the relative stability of the UK labour market in light of the weak economic conditions described above.  The last monthly Labour Market Statistics of the year[3] indicated a slight increase in employment alongside a more significant fall in unemployment.  Employment has now been rising and unemployment falling consistently since the autumn of 2011.  This appears particularly puzzling when compared to previous recessions.  During the recent recession, output fell much more steeply than in the recessions of the early and late 1970s and the early 1990s whilst employment fell by much less.  Between the first quarter of 2008 and the second quarter of 2009, real GDP fell by 6.3% whilst employment fell by just 2%.[4] 

Below inflation wage growth provides one explanation, with UK employees accepting real-terms wage reductions for much of the period since 2008 in order to limit job losses.  However, there are a number of other trends which could indicate continued and deep weaknesses in the labour market.  These include increases in part-time employment than have significantly outstripped recovery in full-time jobs, which could indicate an increasing level of ‘underemployment’.  This is supported by record levels of Labour Force Survey respondents stating that they are working part-time purely because they have been unable to find full-time employment.   Continuing falls in labour productivity alongside rising unit labour costs have been equally concerning, pointing to employers ‘hoarding’ more labour than required to meet the current low levels of demand for goods and services.  This could indicate a risk that, if demand does not start to increase significantly, employment could begin to fall in early 2013 as it ceases to be sustainable for firms to ‘hoard’ this excess capacity.

---

[1] OECD, November 2012. ‘Economic Outlook No 92.’  Paris: OECD.

[2] ONS CROWN COPYRIGHT, ‘November 2012. Second Estimate of GDP, Q3 2012.’  London: TSO.

[3] ONS CROWN COPYRIGHT, 2012. ‘Labour Market Statistics, December 2012’. London: TSO.

[4] ONS CROWN COPYRIGHT, 2012. ‘The Productivity Conundrum, Explanations and Preliminary Analysis’. London: TSO.

November 2012 Labour Market Statistics Briefing

This morning, the Office for National Statistics published the Labour Market Statistics First Release for November, which includes Labour Force Survey data for the period July to September 2012 and Jobseekers’ Allowance (JSA) data for October.   Although the number of adults in employment has increased, the extent of increase is weaker than reported last month.  Moreover, whilst the quarterly LFS measure of unemployment indicates a further fall, the more timely monthly claimant count unemployment has increased by the largest amount in 13 months.  Long-term unemployment (those unemployed for more than a year on the LFS measure) has also increased.  These developments could point to a weakening in the labour market following the recent period of recovery – although it is too early to say with any certainty.  This month’s data has received a more cautious reception in the media compared to previous months, with the BBC reporting city commentators like Howard Archer (chief UK economist at IHS Global Insight) observing a  “softening in the [UK] labour market's recent impressive resilience".

As we have noted in earlier monthly briefings, earnings growth remains weak – with total pay (including bonuses) increasing by 1.8% on the same period a year earlier.  With the news reported yesterday that inflation (on the CPI measure) had increased from 2.2% to 2.7% between September and October 2012, this continues to point to pressure on household incomes.

Over a longer time period, it is again pertinent to point out just how little unemployment has increased during this recession compared to the recessions in the 1990s and 80s, especially when one considers the depth of the contraction in economic output experienced in the last five years.  The latest estimate for the number of adults unemployed on the LFS measure is only 865,000 higher than the same period in 2007 (July to September).   As mentioned in our briefings last month and in August, a glance at the labour productivity estimates helps us understand what may be happening.  The lower than expected increases in unemployment through the Great Recession have been accompanied by falling labour productivity and rising unit labour costs – indicating that employers have been ‘hoarding’ labour, in order to retain skilled staff despite falling production levels.  The further fall in labour productivity indicated in this month’s data, alongside recent business survey results that point to falling output in both manufacturing and the services, suggests that the retention of this spare capacity may soon prove unsustainable – leading to possible falls in employment over the coming months.

Unemployment and Employment Rates

LFS data for the three months to September 2012 indicate that the unemployment rate[1]  has fallen by 0.2 percentage points on the previous quarter, to 7.8% of the economically active population, which is equivalent to 2.51 million individuals.  This is 49,000 lower than the previous quarter and 110,000 lower than the same period a year earlier.   The number of young people (16-24 year olds) who are unemployed fell by 49,000 on the previous quarter – to reach 963,000.  This is equivalent to 20.7% of young people.

However, long-term unemployment (adults unemployed for more than year) increased by 12,000 on the previous quarter, to reach 894,000 individuals. 

The employment rate (for adults aged 16-64) increased slightly, by 0.2 percentage points on the previous quarter, to 71.2%.  The total number of people estimated to be in employment is 29.58 million, up 100,000 on the previous quarter.   However, this increase is less than half the increase reported in last month’s statistical first release.  The employment rate remains lower than its pre-recession peak of 73% (March-May 2008).

Both full-time and part-time employment increased, by 51,000 and 49,000 respectively.   Compared to previous months, the increase in part-time employment appears particularly weak.

Earnings Estimates

Earnings estimates continue to point to weak growth in average pay levels, with regular pay (excluding bonuses), rising by 1.9% between the three months to September 2012 and the same period a year earlier.  Total pay (including bonuses) increased by 1.8% .  In both measures, earnings growth between the latest quarter (July-September 2012) and the same period a year earlier is only 0.1 percentage points higher than the growth between June-August 2012 and the same period a year earlier.

Labour Productivity and Unit Labour Costs

The amount of (inflation adjusted) output per worker fell by 1.1.% between quarter 1 and quarter 2 of 2012 whilst unit labour costs increased by 0.3% over the same period.

Job Seekers’ Allowance Claimants

Jobseekers’ Allowance (JSA) claimants in October 2012 increased by 10,100 on the previous month, to reach 1.58 million.  The claimant count rate was 4.8%, unchanged from the previous month and the same period a year earlier.

Redundancies and Vacancies

In the three months to September 2012, 128,000 people had become redundant, down 22,000 from the previous quarter and down 19,000 from the same period a year earlier.

The number of vacancies (advertised through Jobcentre Plus) in the three months to October 2012 was 479,000 -  up 1,000 compared to the previous quarter and up 16,000 on the same period a year earlier.  The number of ILO unemployed adults to every one vacancy in the three months to September 2012 has fallen to 5.2, compared to 5.4 in the previous quarter.

Key Regional Developments

• The level of unemployment fell compared to the previous quarter in the North East, North West, Yorkshire and the Humber, the West Midlands and the East Midlands – most significantly in the North West, by 26,000 and 0.7 percentage points, and in Yorkshire and the Humber, by 20,000 and 0.7 percentage points. The North East continues to have the highest unemployment rate of the nine English regions, at 9.8%, followed by Yorkshire and the Humber, at 9.1%.
• Unemployment levels increased in the East of England, London and the South East, by 8,000, 6,000 and 6,000 respectively, although the rates remained largely unchanged.
• In the East Midlands, employment fell slightly on the previous quarter, by 3,000 or 0.2 percentage points, to a rate of 71.4%, slightly higher than the UK average of 71.2%.  Unemployment also fell, by 15,000 and 0.6 percentage points, to a rate of 7.7% (compared to 7.8% in the UK).  Employment and unemployment both decreased in the East Midlands due to a corresponding increase in Economic Inactivity (with 19,000 more adults economically inactive compared to the previous quarter).  This could represent an increase in the number of people in full-time education as well as an increase in ‘discouraged workers’ (individuals who have been unemployed for long periods of time and have given up looking for work, thus no longer meeting the ILO criteria for unemployment).

---

[1] 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.

NBS Elite

NBS Elite is a web-based network whereby scholars and experts at Nottingham Business School, or associated in some way with NBS, can deliver a short structured contribution on an identified topic within their area or areas of special expertise. Recent posts include an article on the EU Biofuels policy by Professor Robert Ackrill and an article on the relationship between inheritance and hours worked amongst male entrepreneurs in Britain, by Dr Zhongmin Wu - both from NBS' Division of Economics and colleagues of the ESRB.

NBS Elite also hosts invited contributions from other leading international experts. The editor-in-chief of NBS Elite is Prof. Leighton Vaughan Williams, who is also based at Nottingham Business School.  

The approved format for contributions can be listed in three parts:

1. A maximum of 500 words.
2. A maximum of 2 diagrams, graphs, illustrations, pictures or photographs.
3. A maximum of 5 references or links.

In this way, NBS Elite aims to provide an important and well respected source of accessible knowledge, information and perspectives.  For more information and contact details, go to: http://nbselite.com/ 

October 2012 Labour Market Statistics Briefing

The Office for National Statistics published the October Labour Market Statistics First Release this morning, which includes Labour Force Survey data for the period June to August 2012 and Jobseekers’ Allowance (JSA) data for September.   The data points to an increase in employment levels compared to the previous quarter (March to May 2012) and a corresponding fall in unemployment.  The more timely JSA claimant count also fell compared to the previous month, although the claimant rate has remained flat.  Early press coverage has described this positive picture as “unexpected”.  Some commentators had expected today’s release to show flat unemployment levels compared to the previous quarter, following the August fall in the number of adults unemployed in the UK, which had been attributed to the temporary impacts of the Olympics and principally affected London.    The better than expected data this month has fuelled speculation that the UK labour market could be experiencing a more sustained recovery.

The latest data does show a significant increase in full-time employment, along with part-time employment, with the total number of people in work reaching record levels (since comparable records began in 1971). 

However, earnings growth remains very weak, at 1.7% (including bonuses), well below the rate of inflation – despite the recent falls on both the RPI and CPI measures.  Moreover, today’s ONS release includes estimates of hours worked and labour productivity – which both suggest that the UK economy continues to be operating well below capacity.  Average weekly working hours decreased, affected by the distribution of public holidays in the period and, perhaps more significantly, by the sustained increase in the proportion of adults working part-time observed over successive quarters.  As mentioned in our briefing on the August statistics, weak productivity performance indicates that UK employers are ‘hoarding’ labour, in order to retain skilled staff despite falling production levels.  This month’s release indicates a further fall in output per worker alongside a corresponding increase in unit labour costs, suggesting that retention of such spare capacity may not be sustainable unless output starts to pick up.  

Unemployment and Employment Rates

LFS data for the three months to August 2012 indicate that the unemployment rate[1]  has fallen by 0.2 percentage points on the previous quarter, to 7.9% of the economically active population, which is equivalent to 2.53 million individuals.  This is 50,000 lower than the previous quarter and also down on the same period a year earlier.   The number of young people (16-24 year olds) who are unemployed also fell, by 62,000 on the previous quarter – to reach 957,000, falling below the symbolic 1 million young people unemployed for the first time since last autumn.

The employment rate (for adults aged 16-64) increased by 0.5 percentage points on the previous quarter, to 71.3%.  The total number of people estimated to be in employment is now 29.59 million, up 221,000 on the previous quarter.   The number in employment is the highest since records began in 1971, but the employment rate remains lower than its pre-recession peak of 73% (March-May 2008).

Both full-time and part-time employment increased, by 88,000 and 125,000 respectively.  The number of people in part-time employment reached 8.13 million, which remains at a record high level (since comparable records began in 1992).

Earnings Estimates

Earnings estimates continue to point to very weak growth in average pay levels, with regular pay (excluding bonuses), rising by only 2% between the three months to August 2012 and the same period a year earlier.  Total pay (including bonuses) increased by 1.7% .  Despite being lower than the rate of inflation, the increase in pay on both measures (regular and total pay) has risen by 0.1 percentage points compared to the growth rate reported between the three months to July 2012 and the same period a year earlier.  Total pay and regular pay increased in both the public and the private sector.

Job Seekers’ Allowance Claimants

Jobseekers’ Allowance (JSA) claimants in September 2012 fell by 4,000 on the previous month, to reach 1.57 million.  The claimant count rate was 4.8%, unchanged from the previous month but down 0.1 percentage points from the same period a year earlier.

Redundancies and Vacancies

In the three months to August 2012, 131,000 people had become redundant, down 16,000 from the previous quarter and down 18,000 from the same period a year earlier.

The number of vacancies (advertised through Jobcentre Plus) in the three months to September 2012 was 476,000 -  up 3,000 compared to the previous quarter and up 17,000 on the same period a year earlier.  The number of ILO unemployed adults to every one vacancy in the three months to August 2012 has fallen to 5.3, compared to 5.5 in the previous quarter.

Key Regional Developments

• The level of unemployment decreased compared to the previous quarter in the North East, North West, Yorkshire and the Humber, and the East Midlands – most significantly in the North East, by 11,000 and 0.9 percentage points, and in the North West, by 40,000 and 1.1 percentage points.  However, the North East continues to have the highest unemployment rate of the nine English regions, at 9.9%.
• Unemployment levels increased slightly in the West Midlands, by 5,000, and London, by 10,000, although rates remained flat in these two regions and in the East of England, the South East and the South West.
• In the East Midlands, employment increased on the previous quarter, by 4,000 (or 0.2 percentage points), to a rate of 71.9% (above the UK average of 71.3%).  Unemployment fell more significantly in the East Midlands, by 13,000 (or -0.5 percentage points), to a rate of 7.8% (slightly lower than the UK average of 7.9%).

---

[1] 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.

ESRB contributes to Smith Institute Report

On Tuesday the 11th of September, a new report on housing and regeneration funding in the East Midlands was launched by the Smith Institute at a Parliamentary event.  The ESRB contributed to this report by providing a detailed overview of the East Midlands economy, labour market and demographic trends, highlighting the impact of the recession and distinct regional sectoral strengths, such as the fact that the East Midlands has a higher proportion of employment and output attributed to manufacturing than any of the nine English regions and also has a strong productivity advantage in this sector.  These observations were linked to the Government’s objective around ‘rebalancing’ the economy, and informed recommendations made by the authors on how opportunities within the East Midlands can be better realised.  The ESRB research also demonstrated to policy makers the importance of commuting flows and transport links, the economic linkages between urban and rural areas, and recent research evidence on the key role of high growth firms in private sector job generation.  In addition to this analysis, the ESRB provided critical input to  the authors’ recommendations, drawing from their experience in project and programme evaluation and regional policy development.  This material was presented to a round-table of stakeholders by ESRB staff at two events, one hosted at NTU’s Nottingham Conference Centre and the other hosted by East Midlands Councils in Melton Mowbray.

September 2012 Labour Market Statistics Briefing

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[1]  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

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.

---

[1] 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.