Labour market LIVE: from Learning and Work Institute (16 Aug)

  • Unemployment has increased by 8,000 from last month’s published figure to 1,294,000 (quarterly headline is up by 35,000).
  • The unemployment rate is 3.8%, which showed no change on the last month and increased 0.1 percentage points on the last quarter.
  • The ONS figure for claimant unemployed is 1,531,800, reduced by 10,500 on the last month, and the claimant rate is 3.9%.
  • The number of workless young people (not in employment, full-time education or training) is 887,000, which has decreased by 18,000 on the last quarter, representing 13% of the youth population (an increase of 0.1 percentage points).
  • Youth unemployment (including students) is 337,000, which has decreased by 9,000 on the last quarter.
  • Vacancies in May-Jul 2022 (in the ONS official series) are up to 1,274,000 after recovering strongly from the low point of 329,000 in April to June 2020. There are now 1.0 unemployed people per vacancy.
  • The employment rate is 76.0%, which has (decreased by 0.3 percentage points on last month’s published figure and is down by 0.1 percentage points in the preferred quarterly measure).

Learning and Work Institute comment

The labour market figures published on 16 August show the cost of living crisis is deepening, with rising inflation meaning we saw the biggest quarterly drop in real regular earnings this century and worse perhaps to come. Employment rose last month, but the employment rate remains below pre-pandemic levels due largely to people leaving the labour market – in addition, unemployment is beginning to increase, which may be the early signal of an economic downturn. Despite this, employers are still hiring at near-record levels, but there are fewer potential workers for employers to recruit, with 527,000 over 50s leaving the labour market since the pandemic started.

Stephen Evans, Chief Executive at Learning and Work Institute, said:

‘The pain from the cost of living crisis is deepening with real regular wages continuing to drop at their fastest rate on records dating back to the start of the century, driven by rising inflation. Things will get tougher for households with the sharpest rises in the energy price cap still to come, perhaps to over £4,000 per year. The urgency for further emergency support from the Government grows.

The UK also faces a recruitment crunch with employers struggling to fill all their roles, despite 1.9 million people either starting work or changing jobs in the last quarter. This is driven by higher numbers of over 50s and people who are long-term sick leaving the labour market.

To tackle these twin challenges we need immediate help and a plan for growth, including better employment support for people who’ve left the labour market. Otherwise, hardship will grow and our economy will be smaller than it needs to be.

Helen Gray, Chief Economist at Learning and Work Institute, said:

‘The picture of real wages failing to keep pace with the cost of living is becoming all too familiar. Whilst the consequences of rising prices are alarming for working households, the dire situation is compounded for the unemployed and the involuntarily economically inactive. The increase in economic inactivity amongst those with long-term health problems suggests that more support is needed for this group. It is also concerning to see the rise in the number of those aged 50-64 who are economically inactive, given the risk that any savings for retirement are eroded by the high rate of inflation. Given the high numbers of vacancies relative to those seeking work, it is vital that the government works with employers to ensure that good quality jobs are available to a more diverse range of employees to draw economically inactive people back into the labour market.’

Labour Market Briefing

Employment rose by 160,000 between January to March 2022 and April to June 2022. In the last 12 months employment increased by 489,000.

Unemployment is up by 35,000 between January to March 2022 and April to June 2022. The unemployment rate is up by 0.1 percentage points to 3.8%.

Economic inactivity increased by 26,000 between January to March 2022 and April to June 2022. The inactivity rate was 21.4% over the quarter.

The national claimant count has fallen by 10,500.

Youth unemployment is down by 9,000. There are 429,000 unemployed young people, and 269,000 (3.9% of the youth population) who are unemployed and not in full-time education.

Self-employment has fallen by 31,000 this year. The number of employees has risen by 473,000 over the year. Involuntary part-time employment fell by 68,000 this quarter to 0.8 million, 10.2% of all part-time workers