Headline statistics from the Office for National Statistics (ONS):
Unemployment is 1,623,000, down by 52,000 from last month’s published figure (quarterly headline decreased by 121,000) and the unemployment rate at 4.8%, is down by 0.2 percentage points on last month and down by 0.3 percentage points on last quarter.
The ONS figure for claimant unemployed is 2,629,000, down by 15,100 on last month, and the claimant rate is 7.2%.
The number of workless young people (not in employment, full-time education or training) is 955,000, down by 35,000 on the quarter, representing 14.0% of the youth population (down by 0.6 percentage points).
Youth unemployment (including students) is 536,000, and has fallen by 53,000 on the quarter. Vacancies in Feb-Apr 2021 rose (in the ONS official series) to 657,000 after recovering strongly from the low point of 341,000 in April to June 2020.
There are now 2.6 unemployed people per vacancy. The employment rate is 75.2% (the same as last month’s published figure and has risen by 0.2 percentage points in the preferred quarterly measure).
Learning and Work Institute comment
The labour market figures published on 18 May suggest that the labour market has continued to improve with positive impacts felt from the April economic re-opening.
Duncan Melville, Chief Economist at Learning and Work Institute, commented:
‘The headline labour market numbers from the Labour Force Survey (LFS) for the first three months of 2021 point to an improving labour market. Compared to the last three months of 2020, employment grew by 84,000, the first quarterly increase since the first three months of 2020, before the onset of the COVID-19 pandemic. Unemployment fell by 121,000 – the largest quarterly fall in six and a half years. Working age economic inactivity, however, rose in the quarter which was surprising as an improving labour market might have been expected to encourage people to start looking for work again. (Below I comment on this rise in inactivity in more detail.) Consistent with this improving labour market picture, the HMRC payroll data for March has been revised since last month and now shows an increase rather than a fall, and the claimant count and vacancy data for March released last month also point to improving labour market prospects.
The monthly LFS employment numbers are frankly odd. Employment rose strongly in January and February by around 180,000 in each month and then fell by 217,000 in March, the opposite pattern to that which would be expected given the opening up of the economy in April. This is difficult to rationalise, stands in contrast with the data noted above and is perhaps down to the smaller survey sample sizes which underpin the monthly numbers, which increases the amount of noise as opposed to signal in this data.
The data for April also point to an improving labour market. The official three-month vacancy data for February to April increased again and the monthly seasonally unadjusted numbers for April showed another dramatic increase pointing to a strong increase in labour demand. Similar patterns are also seen in the on-line job adverts data from Adzuna and the Indeed Job Postings data. The HMRC payroll numbers for April also showed a strong increase of 97,000 which is close to five times the average monthly increase seen in 2019 prior to the Pandemic. The claimant count fell for the second consecutive month in April.
The rise in inactivity seen in the first three months of 2021 is potentially concerning so it warrants a deeper delve. Overall, compared to the last three months of 2020, working age economic inactivity rose by 48,000. The largest two factors behind this rising inactivity were being a student (up by 117,000) and retirement (up by 56,000) with some other categories falling, most notably those looking after their family or home (down by 74,000). There was also a notable increase in the economically inactive who did not want a job (up by 110,000). Again, this rise was largely driven by students and to a lesser extent retirement. This picture was supported by the age breakdown with inactivity rising amongst young people aged under 24 and amongst older people aged 50 and over but falling amongst those aged 25-49. The picture that emerges is a mixed one. The rise in inactivity from increasing numbers of students may in the longer term turn out to be a positive development if young people are acquiring greater skills which should provide a boost to future productivity levels. However, it is difficult to view the rise in retirement and economic inactivity amongst the over 50s as positive. One of the many costs of the pandemic would appear to be withdrawals from the labour market by older workers who might otherwise have continued to work.’
Paul Bivand, Associate Director for Statistics and Analysis at Learning and Work said:
‘Many of the figures announced by the Office for National Statistics this morning are likely to be revised over the summer. They announced yesterday (17th May 2021) that they will be revising the Labour Force Survey weighting using the assistance of the HMRC employee data to give greater confidence, particularly, to the estimates of numbers of migrants. The current system is to calculate estimates totalling to population projections calculated before the pandemic. If migrants have subsequently left, this produces implausible rises in the UK-born population. Further revisions will occur when Census returns have been processed.’
Employment is up by 84,000 between October to December 2020 and January to March 2021. In the last 12 months employment is down by 529,000.
Unemployment is down by 121,000 between October to December 2020 and January to March 2021. and the unemployment rate decreased by 0.3 percentage points to 4.8%.
Economic inactivity rose by 48,000 between October to December 2020 and January to March 2021, and the inactivity rate rose by 0.1 percentage points to 21.0% in the quarter.
The national claimant count decreased by 15,100.
Youth unemployment decreased by 53,000. There are 536,000 unemployed young people, and 370,000 (5.4% of the youth population) who are unemployed and not in full-time education.
Self-employment is down by 617,000 this year. The number of employees is up by 142,000 over the year. Involuntary part-time employment is 1.0 million, 13.1% of all part-time workers. The highest proportion since 2016.