Timms: Employment rising despite economic pressures

16 July 2008

The number of people in employment rose by 61,000 in the three months to February and the numbers classed as economically active increased by 73,000, according to new figures released by the Office for National Statistics today.

Unemployment is 47,000 lower than for the same period a year ago despite rising by 12,000 in the three months to February. The numbers claiming Jobseeker’s Allowance have increased by 15,500 on the month but are down 23,100 on the year and still around half that of 1997.

Stephen Timms, Minister for Employment and Welfare Reform, said:

“Today’s figures show that the number of people in work in the UK is at a record level. Employment continues to grow, with 60,000 more people in work now than three months ago, and over 400,000 more in work than this time last year. The rise in the claimant count is a concern but needs to be seen in context: the number of people on Jobseeker’s Allowance is lower than a year ago and just over half its 1997 level

“We are working closely with local communities to develop back-to-work support that is tailored to their areas. This month we’ve witnessed the signing of Local Area Agreements between local and central government which join up services more effectively to allow greater flexibility in the provision of employment and skills support.

“These Agreements, along with initiatives such as City Strategy Partnerships and the Working Neighbourhood Fund are helping to join up services and foster real opportunities so that none of our communities are left behind.”

Background to labour market statistics: July 2008

This month’s labour force survey covers March to May 2008. The claimant unemployment and vacancy count dates were 12 June and 6 June respectively.

Employment is at record levels

• 29.6 million people were in work in March to May, the highest figure on record.
• Employment rose by 61 thousand on the quarter and 413 thousand on the year.
• The employment rate is 74.9%, unchanged on the quarter, and up 0.4 percentage points on the year.

The number of people claiming JSA has risen this month, but the overall number of people claiming a key out of-of-work benefit is falling

• The claimant count was 840.1 thousand in June 2008, up 15.5 thousand on the month, but down 23.1 thousand on the year. The claimant unemployment rate, at 2.6%, is unchanged this month but down 0.1 percentage points on the year.
• In the year to November 2007, the number of people claiming incapacity benefits fell by 31 thousand, to 2.64 million and the number receiving lone parent benefits fell 34 thousand to 742 thousand.

ILO unemployment has risen this quarter but remains historically low

• 1.62 million people were ILO unemployed in March to May, up by 12 thousand on the quarter but down 47 thousand on the year.
• The ILO unemployment rate is 5.2%, unchanged on the quarter and down 0.2 percentage points on the year.

Economic inactivity is improving

• the economic inactivity level is 7.87 million, up 7 thousand on the quarter, and down 60 thousand on the year.
• the economic inactivity rate is 20.9%, unchanged on the quarter and down 0.3 percentage points on the year.
• excluding students, inactivity as a proportion of the working age population is down 0.4 percentage points over the last year, at 15.6%.

Vacancies remain historically high and redundancies are very low

• ONS’s vacancy survey estimates an average of 655.1 thousand unfilled vacancies in the three months to June 2008, down 32.2 thousand on the quarter, and up 5.9 thousand on the year
• More than 10,000 new vacancies are placed at Jobcentres every day and many more come up through other recruitment channels
• There were 118 thousand redundancies this quarter, up 10 thousand on the previous quarter and down 2 thousand on the previous year.

Earnings growth in the year to May was 3.8%, down 0.1 percentage points from April

• Excluding bonuses, average earnings growth was 3.8%, down 0.1 percentage points from the April figure.
• Between May 1997 and May 2007, the number of people claiming one of the main out-of-work benefits fell by 1,053,000. Taking account of the most up-to-date information – June 2008 for the claimant count and November 2007 for the other benefits, suggests there has been further improvement since then, though this will need to be confirmed when data for May 2008 is available for all benefits later this year.

Key out-of-work benefits: latest levels, in thousands ¹

1. This table includes the main out-of-work client group categories, with the exception of carers who are not subject to activation policies in the same way as other groups.

2. UK figures (seasonally adjusted) published by ONS. This 100% series is the most reliable and up-to-date source for claimant unemployment. Latest figures are for June 2008.

3. GB figures (not seasonally adjusted). Published by DWP back to August 1999 as part of the 100% working age client group analysis. Earlier consistent figures have been created by combining information from the previously published 5% sample data with the WPLS data. A consistent series for the UK as a whole is not readily available.

4. GB figures (not seasonally adjusted). Published by DWP back to August 1999 as part of the 100% working age client group analysis. Before this point a 5% sample series is used, scaled to be consistent with the 100% data.

5. Excludes around 86,000 claimants in receipt of income support and carers allowance.  This group has been stable over time and does not affect the estimated decrease in benefit claimants.