The current position in the UK labour market

Current labour market position in context Factors driving recent trends The position of particular groups and areas

The employment rate is about the same as in 2009 but is higher than at previous troughs

In the last two decades, employment growth has been driven by the private sector Change in employment by sector (000s) Excl. financial corporations

Despite a larger fall in output, employment has fallen by less than in previous recessions… Cumulative change in employment rate (% points)

…but the rise in unemployment is similar to that in the 1990s recession… Cumulative change in ILO unemployment rate (% points)

…because there has not been the same drift away from the labour market into inactivity Cumulative change in inactivity rate (% points)

Current labour market position in context Factors driving recent trends The position of particular groups and areas

The overall changes in ILO and claimant unemployment since 2008 have been similar… Level of ILO and claimant unemployment (000s)

…although short-term trends in the ILO measure are more volatile, especially in 2011 ILO and claimant unemployment – 3 month on 3 month change (000s)

Redundancies picked up in the first half of 2011, particularly amongst women… Redundancies (000s)

…and recruitment softened, although there are now some signs of improvement Notified and unfilled vacancies (000s) Jobcentre Plus notified vacancies rolling 12mth average (RHS) UK unfilled (LHS) Excluding Census

Claimants of non-JSA benefits (000s) However, there are also policy changes that have been affecting the figures… Claimants of non-JSA benefits (000s)

…while those on government programmes now mostly stay within the JSA figures… Year on year change in % of JSA inflow leaving within x months Aged 18-24

…which is likely to have effected all durations, but particularly long-term unemployment Year on year change in % of JSA inflow leaving within x months Aged 25+

Long-term (1 year plus) unemployed (000s) The effect can be seen in the numbers unemployed for a year or more, particularly JSA claimants Long-term (1 year plus) unemployed (000s)

Current labour market position in context Factors driving recent trends The position of particular groups and areas

Youth unemployment remains lower than after previous recessions Most under 25s are either full-time students, in work or in work-based learning…. …but 1.4 million have left full-time education and aren’t in work/training Breakdown of 16-24 year olds Not in full-time education or work/training (000s) Employment rate of those not in FTE is 66.0% ILO unemployed not FTE Part-time study Work/training not FTE 2.8 million 731,000 Inactive not FTE 7.3 million 702,000 In work/ training or full-time study 5.9 million (80% of the age group) Full-time education 3.1 million Youth unemployment remains lower than after previous recessions 1.4 million 16-24s aren’t in work or full-time education – 731,000 unemployed and 713,000 inactive. Most in this group are NEET – not in work/training or any education - apart from about 200,000 who say they are part-time students. Excluding students, youth unemployment is lower than previous peaks, both in absolute terms and as a proportion of the population. But this translates into a higher rate, because rising participation in education means the youth labour force is smaller than in the past. ILO unemployed, excluding students (000s)

UK claimant count rate and regional spread (%) Despite widening in the recession, the regional spread of JSA is narrower than it used to be UK claimant count rate and regional spread (%) Max UK Min

The male/female employment rate gap has narrowed over time… …and the female unemployment rate is lower than at past peaks Employment rate by gender (%) Female ILO unemployed level and rate (000s & %) The gender employment gap narrowed in the recession. After widening slightly as the male employment rate recovered in 2010, the position has stabilised with the gap just above the lowest on record. Female ILO unemployment rose by 22,000 this quarter to 1.13 million. But as the female labour force has grown over time the unemployment rate, at 7.7%, is lower than previous peaks. Compared to this time last year there are more women in employment, with the rate flat. But unemployment has also risen because more women are joining the labour force from inactivity. Female unemployment is up on the year, driven by falling inactivity Change in labour market in last year (% points)

Of all black young people, 75% are in work/study and 17% unemployed Most under 25s are either full-time students, in work or in work-based learning Of all black young people, 75% are in work/study and 17% unemployed Breakdown of 16-24 year olds Breakdown of black 16-24 year olds (Q4 2011) ILO unemployed not FTE Employment rate of those not in FTE is 66% Employment rate of those not in FTE is 41% ILO unemployed not FTE Work/training not FTE 40 thousand Work/training not FTE 2.8 million 38,000 731,000 Inactive not FTE Inactive not FTE 7.3 million 226 thousand 702,000 19,000 In work/ training or full-time study 80% In work/ training or full-time study 75% Full-time education 3.1 million Full-time education 129 thousand The latest 2011 data is not comparable to earlier years 80% of 16-24s are in full-time education or work. For black young people the figure is lower, at 75%; within this a larger proportion were in full-time education and a smaller one in work/training. Excluding students, about 1 in 6 black young people were unemployed, against 1 in 10 for all young people. However, inactive non-students as a proportion of the population was lower. Changes to the LFS ethnicity questions mean the latest figures should not be compared to earlier years. ILO unemployed non- students (% of pop)

Summary Some improvement since recession – employment up 275,000 Not yet rising fast enough to see significant recovery: - population growing so employment rate broadly flat since 2009 - private sector up 680,000 but fall in public sector has slowed overall rise Unemployment has risen in the last year partly due to weaker economic growth, but signs of stabilisation in latest figures Also need to take account of impact of policy changes: - more people joining JSA from other benefits - these groups on average may flow off JSA more slowly - people no longer leave JSA automatically when they start a programme Focus on unemployment means too negative a story - shift from inactivity puts upward pressure on unemployment - but will be beneficial as recovery matures as it means more of the workless group is close to the labour market