Monday, 22 October 2012

NBS Elite

NBS Elite is a web-based network whereby scholars and experts at Nottingham Business School, or associated in some way with NBS, can deliver a short structured contribution on an identified topic within their area or areas of special expertise. Recent posts include an article on the EU Biofuels policy by Professor Robert Ackrill and an article on the relationship between inheritance and hours worked amongst male entrepreneurs in Britain, by Dr Zhongmin Wu - both from NBS' Division of Economics and colleagues of the ESRB.

NBS Elite also hosts invited contributions from other leading international experts. The editor-in-chief of NBS Elite is Prof. Leighton Vaughan Williams, who is also based at Nottingham Business School.  

The approved format for contributions can be listed in three parts:

  1. A maximum of 500 words.
  2. A maximum of 2 diagrams, graphs, illustrations, pictures or photographs.
  3. A maximum of 5 references or links.
In this way, NBS Elite aims to provide an important and well respected source of accessible knowledge, information and perspectives.  For more information and contact details, go to: 

Wednesday, 17 October 2012

October 2012 Labour Market Statistics Briefing

The Office for National Statistics published the October Labour Market Statistics First Release this morning, which includes Labour Force Survey data for the period June to August 2012 and Jobseekers’ Allowance (JSA) data for September.   The data points to an increase in employment levels compared to the previous quarter (March to May 2012) and a corresponding fall in unemployment.  The more timely JSA claimant count also fell compared to the previous month, although the claimant rate has remained flat.  Early press coverage has described this positive picture as “unexpected”.  Some commentators had expected today’s release to show flat unemployment levels compared to the previous quarter, following the August fall in the number of adults unemployed in the UK, which had been attributed to the temporary impacts of the Olympics and principally affected London.    The better than expected data this month has fuelled speculation that the UK labour market could be experiencing a more sustained recovery.

The latest data does show a significant increase in full-time employment, along with part-time employment, with the total number of people in work reaching record levels (since comparable records began in 1971). 

However, earnings growth remains very weak, at 1.7% (including bonuses), well below the rate of inflation – despite the recent falls on both the RPI and CPI measures.  Moreover, today’s ONS release includes estimates of hours worked and labour productivity – which both suggest that the UK economy continues to be operating well below capacity.  Average weekly working hours decreased, affected by the distribution of public holidays in the period and, perhaps more significantly, by the sustained increase in the proportion of adults working part-time observed over successive quarters.  As mentioned in our briefing on the August statistics, weak productivity performance indicates that UK employers are ‘hoarding’ labour, in order to retain skilled staff despite falling production levels.  This month’s release indicates a further fall in output per worker alongside a corresponding increase in unit labour costs, suggesting that retention of such spare capacity may not be sustainable unless output starts to pick up.  

Unemployment and Employment Rates
LFS data for the three months to August 2012 indicate that the unemployment rate[1]  has fallen by 0.2 percentage points on the previous quarter, to 7.9% of the economically active population, which is equivalent to 2.53 million individuals.  This is 50,000 lower than the previous quarter and also down on the same period a year earlier.   The number of young people (16-24 year olds) who are unemployed also fell, by 62,000 on the previous quarter – to reach 957,000, falling below the symbolic 1 million young people unemployed for the first time since last autumn.

The employment rate (for adults aged 16-64) increased by 0.5 percentage points on the previous quarter, to 71.3%.  The total number of people estimated to be in employment is now 29.59 million, up 221,000 on the previous quarter.   The number in employment is the highest since records began in 1971, but the employment rate remains lower than its pre-recession peak of 73% (March-May 2008).

Both full-time and part-time employment increased, by 88,000 and 125,000 respectively.  The number of people in part-time employment reached 8.13 million, which remains at a record high level (since comparable records began in 1992).

Earnings Estimates
Earnings estimates continue to point to very weak growth in average pay levels, with regular pay (excluding bonuses), rising by only 2% between the three months to August 2012 and the same period a year earlier.  Total pay (including bonuses) increased by 1.7% .  Despite being lower than the rate of inflation, the increase in pay on both measures (regular and total pay) has risen by 0.1 percentage points compared to the growth rate reported between the three months to July 2012 and the same period a year earlier.  Total pay and regular pay increased in both the public and the private sector.

Job Seekers’ Allowance Claimants
Jobseekers’ Allowance (JSA) claimants in September 2012 fell by 4,000 on the previous month, to reach 1.57 million.  The claimant count rate was 4.8%, unchanged from the previous month but down 0.1 percentage points from the same period a year earlier.

Redundancies and Vacancies
In the three months to August 2012, 131,000 people had become redundant, down 16,000 from the previous quarter and down 18,000 from the same period a year earlier.

The number of vacancies (advertised through Jobcentre Plus) in the three months to September 2012 was 476,000 -  up 3,000 compared to the previous quarter and up 17,000 on the same period a year earlier.  The number of ILO unemployed adults to every one vacancy in the three months to August 2012 has fallen to 5.3, compared to 5.5 in the previous quarter.

Key Regional Developments
  • The level of unemployment decreased compared to the previous quarter in the North East, North West, Yorkshire and the Humber, and the East Midlands – most significantly in the North East, by 11,000 and 0.9 percentage points, and in the North West, by 40,000 and 1.1 percentage points.  However, the North East continues to have the highest unemployment rate of the nine English regions, at 9.9%.
  • Unemployment levels increased slightly in the West Midlands, by 5,000, and London, by 10,000, although rates remained flat in these two regions and in the East of England, the South East and the South West.
  • In the East Midlands, employment increased on the previous quarter, by 4,000 (or 0.2 percentage points), to a rate of 71.9% (above the UK average of 71.3%).  Unemployment fell more significantly in the East Midlands, by 13,000 (or -0.5 percentage points), to a rate of 7.8% (slightly lower than the UK average of 7.9%).

[1] 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.