On the 16th of May, the Office for National Statistics published their monthly Labour Market Statistics First Release – which includes Labour Force Survey data for the period January-March 2012 and Jobseekers’ Allowance data for April. As in last month’s release, unemployment has fallen on the Labour Force Survey measure, but this month it has also fallen on the more timely claimant count measure. These latest estimates received a relatively muted reception in the media. This was partly due to the fact that they were published alongside news of the accelerating crisis in the Eurozone, following the failure of Greek politicians to form a government. Media commentators and politicians also exhibited caution because of the nature of the data itself – as the increases in employment were entirely driven by part-time jobs, with the number of people working full-time falling compared to the previous quarter. This suggests that the UK labour market remains relatively week, and it remains premature to point to recovery with any certainty.
Commenting on the data in the Guardian, Jonathan Portes, Director of the National Institute of Social and Economic Research (NIESR), justified this caution, observing that, “the net increase in the number of people in employment is primarily the result of fewer people leaving or losing jobs, rather than more people being hired; this suggests that workers are prepared to accept lower pay or fewer hours as an alternative to being laid off.” John Philpott, chief economic advisor at the Chartered Institute of Personnel and Development (CIPD), also suggested to the BBC that lower wage costs and an increased availability of casual, part-time work may explain why unemployment has not continued to increase, despite declining output during the same quarter.
Unemployment and Employment Rates
LFS data for the three months to March 2012 indicate that the unemployment rate has fallen by 0.2 percentage points on the previous quarter, to 8.2% of the economically active population. This is equivalent 2.63 million individuals. However, the unemployment rate is still 0.5 percentage points higher than the same period one year earlier - and remains at the highest level since autumn 1996. The number of unemployed men fell by 42,000 compared to the previous quarter, whilst the number of unemployed women fell only slightly, by 3,000 – consistent with the picture of women being more adversely affected by recent developments than men, which we discussed in more detail in our briefing on last month’s data.
The employment rate (for adults aged 16-64) increased by 0.2 percentage points on the previous quarter, to 70.5%. However, as also reported in our briefing last month, the latest data again indicates that an increase in part-time employment, of 118,000, masked a fall in full-time employment, of 13,000. The number of people working part-time because they cannot find a full-time job remains at its highest level since comparable records began in 1992, at 1.42 million.
Earnings estimates continue to point to very weak growth in average pay levels, with regular pay (excluding bonuses), rising by only 1.6% between the three months to March 2012 and the same period a year earlier, less than half the current rate of inflation.
Job Seekers’ Allowance Claimants
The more timely measure of Jobseekers’ Allowance (JSA) claimant unemployment for April 2012 fell by 13,700 compared to the level in March 2012. This is the largest fall since July 2010, taking the total count of JSA claimants to 1.59 million, which is equivalent to 4.9% of adults. Despite the fall in absolute numbers, the rate is unchanged from the previous month (and is 0.3 percentage points higher than the same period a year earlier).
Redundancies and Vacancies
In the three months to March, 172,000 people had become redundant, up 7,000 from the previous quarter and up 49,000 from the same period a year earlier.
The number of vacancies (advertised through Jobcentre Plus) in the three months to April 2012 was 457,000, down 7,000 compared to the previous quarter and down 12,000 on the same period a year earlier. Because of the fall in ILO unemployment, there has been a slight fall in the number of unemployed adults to every one vacancy compared to the previous quarter, from 5.8 to 5.7.
Key Regional Developments
- Despite falling in the UK overall, unemployment increased in the North East and North West (where it increased by 0.3 and 0.4 percentage points respectively on the previous quarter), and the South West (by 0.4 percentage points), and remained flat in London and the South East.
- The biggest decreases in unemployment were experienced in Yorkshire and the Humber (where it fell by 0.9 percentage points or 24,000 individuals) and the West Midlands (falling by 0.8 percentage points and 19,000 individuals). However, unemployment rates remain above the national average in both these regions, at 9% and 8.5% respectively.
- In the East Midlands, unemployment fell by 6,000 individuals (or 0.4 percentage points), and remains below the national average at 7.8%. The employment rate in the East Midlands increased by 1 percentage point, or 32,000 individuals, and remains higher than the national average at 72.1%.
Source: ONS Crown Copyright, 'Labour Market Statistics, May 2012', 16 May, 2012
 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.