Previous Month 

September 2018

The labour market figures published on 11 September indicate that the labour market is slowing.

Download the full analysis for September 2018.

  • Unemployment is 1,361,000, has risen by 1,000 from last month’s published figure (quarterly headline is down by 55,000) and the unemployment rate was stable at 4.0% in the month and decreased by 0.2 percentage points on last quarter.
  • The ONS figure for claimant unemployed is 918,800, up by 8,700 on last month, and the claimant rate is 2.6%.
  • The number of workless young people (not in employment, full-time education or training) is 982,000, increased by 9,000 on the quarter, representing 14% of the youth population (and rose by 0.2 percentage points).
  • Youth unemployment (including students) is 488,000, down 32,000 on the quarter.
  • There are 1.6 unemployed people per vacancy. Learning and Work Institute estimates this figure may rise slightly next month.
  • The employment rate is 75.5% (down by 0.1 percentage points on last month’s published figure and also fell by 0.1 percentage points in the preferred quarterly measure).

Duncan Melville, Chief Economist at Learning and Work Institute, commented:

‘Unemployment has fallen again by 55,000 in the three months to May to July 2018. However, this is because people are leaving the labour market with inactivity up by over a 100,000, and not because people are moving into work. Employment has plateaued and been at around the same level (32.4 million) for the last four months. This all suggests a slowdown in the labour market.

The claimant count has risen again this month which is also consistent with a slowdown but may also reflect administrative problems with the operation of Universal Credit.

Vacancies have stabilised at historically high levels. Wage growth edged up in this month’s figures to 3.0% a year above the inflation rate, so real wages rose by 0.5% in today’s figures. This represents a welcome increase in living standards, but it should be remembered that such rates of growth are very modest in historical terms.

The latest workforce job figures, which are released on a quarterly rather than a monthly basis, stand in contrast with the above figures taken from the Labour Force Survey. They show a solid increase in workforce jobs of 84,000 between March and June 2018.

Overall though, today’s numbers suggest that the labour market is slowing. If inactivity continues to rise, rather than unemployment, when the labour market slows, then this would reverse a major success of UK policy towards ensuring workless people are also applying for jobs. The Northern Ireland (and US) pattern of high inactivity and low unemployment is ineffective for both employers and workless people.’

Paul Bivand, Learning and Work Institute's associate director for statistics and analysis said:

"The number of unemployed people claiming benefits continues to rise, while surveyed unemployment has fallen. There remain very considerable doubts as to whether the Universal Credit system is as effective at returning people to work as quickly as the old system. The lack of statistics on Universal Credit flows to work (in the legacy benefit statistics since the 1980s) makes the case that Universal Credit is making return work for claimants more difficult."

Employment rose by 3,000 between February to April 2018 and May to July 2018. In the last 12 months employment rose by 261,000.

Unemployment has fallen by 55,000 between February to April 2018 and May to July 2018, and the unemployment rate decreased by 0.2 percentage points to 4.0% in the quarter the lowest level since 1975.

Economic inactivity is up by 108,000 between February to April 2018 and May to July 2018, and the inactivity rate has risen by 0.2 percentage points to 21.2% in the quarter.

The national claimant count rose by 8,700. This takes account of normal seasonal effects but adjusted figures are not published for local areas. The actual number of claimants, nationally, rose by 13,000 in the month to August. Therefore, it should not be surprising that figures for local areas will show rises compared to the national picture.

The proportion of people leaving the claimant count (or the ‘leavers rate’) is now stable at 14.6%. This is now well below the level in early 2017 of 17.1%. Jobseeker’s Allowance off-flow rates for JSA claimants rose. Read more.

Chart 1: UK unemployment (ILO)

The latest unemployment figure is 1,361,000. It has risen by just 1,000 from the figure published last month. On the basis of later claimant count figures, Learning and Work Institute estimates that unemployment could rise, if unemployment follows the claimant count pattern. The unemployment rate remained at 4.0%.

Chart 2: Percentage unemployed not claiming Universal Credit or JSA

The proportion of unemployed people not claiming Universal Credit or Jobseeker’s Allowance has fallen to 33.9%; (461,000).

Chart 3: Youth long-term unemployment (six months and over, 18-24)

Youth long-term unemployment (which can include students) has risen by 4,000 from last month’s figure and is now 133,000.

The youth long-term Jobseeker’s Allowance count remains far behind, at 18,500. The count fell by 700 this month.

Chart 4: Adult long-term unemployment (12 months and over, 25+)

Adult long-term unemployment on the survey measure is now 278,000. The Jobseeker’s Allowance measure is 151,500. Universal Credit has had less impact on adult claim numbers than for 18-24s.