The ONS have released the latest Labour Market Overview covering the months September – November, there is additional data that covers December.
The Headlines
- There are 32.50 million people aged 16 years and over in employment, 398,000 fewer than a year earlier, 88,000 less than the previous quarter. This is the largest annual decrease since December 2009 to February 2010.
- The employment rate is 75.2%; this is 1.1 percentage points (ppts) down on the previous year and down 0.4 ppts compared with the previous quarter.
- There are 1.72 million people unemployed, up 418,000 on the same period the previous year and up 202,000 on the previous quarter.
- The unemployment rate is 5.0% this is 1.2 ppts higher than a year earlier and 0.6 ppts higher than the previous quarter.
- 8.59 million people aged between 16 and 64 years are not in the labour force (economically inactive). This was 87,000 more than a year earlier but 33,000 less than the previous quarter.
- The economic inactivity rate is 20.7%; this is up by 0.2 ppts on the same period the previous year but down by 0.1 ppts on the quarter.
- The Claimant Count increased slightly in December 2020 to 2.6 million. This represents a monthly increase of 0.3% and an increase of 113.2%, or 1.4 million, since March 2020.
- In October to December 2020, there were an estimated 578,000 vacancies, which is a quarterly increase of 81,000 vacancies. This was the smallest quarterly increase since July to September 2020.
Other data shows a record high of 395,000 redundancies; an increase by a record 280,000 on the year, and 168,000 on the quarter. The wholesale and retail trade industry was responsible for about half of the decrease in the proportion of the workforce on furlough over the period. The number of payrolled employees fell by 2.7% compared with December 2019, which is a fall of 793,000 employees; since February 2020, 828,000 fewer people were in payrolled employment.
What does this mean for youth employment?
- The number of 16-24 year olds employed stands at 3,561,077 . The number employed has fallen by 24,487 on the last quarter and by 203,386 on last year. This translates to an employment rate of 52%, down 0.5 ppts on the previous quarter and down 2.6 ppts on the previous year.
- The number of 16-24 year olds unemployed stands at 596,400, up 15,403 on the previous quarter, up 114,662 on the previous year. This is an unemployment rate of 14.2%, up 0.1 ppt on the previous quarter, up 2.9 ppts on the previous year.
- The number of 16-24 year olds economically inactive stands at 2,699,569, a decrease of 43,662 on the previous quarter, but up 53,514 on the previous year. This is an economic inactivity rate of 9.4%, down 0.6 ppts on previous quarter but up 1.0 ppt on previous year.
- The number of 16-24 year olds included in the claimant count (claiming unemployment related benefits) is 515,905. This is an increase of 2,730 or 0.5% in the last quarter and 281,413 or 120% on the previous year.
Our Commentary
There is a fall in employment and more significant rises in unemployment; for all ages the employment rate has fallen to 75.2% and the unemployment rate has risen to 5% for the first time in 5 years. The stand out figures from this month are redundancy figures; whilst the figures have been kept lower than they would have been without furlough, they are at a record high and the impacts of a third lockdown are not reflected in these statistics. This alongside the fall again in vacancies and in new starters show that people able and looking for work are unable to find jobs in a tough economic crisis.
Unemployment continues to affect all young people, 16-17 year olds more so than 18-24 year olds. The unemployment rate for 16-17 year olds not in education is 22.7%, compared to 12.7% for 18-24 year olds not in education. That said, the latest figures do show that young people as a whole (16-24) are being impacted more by the pandemic than other age groups, with an unemployment rate of 14.2%. The latest information around the wholesale and retail trade industry concerns us; they are responsible for half of the fall in employment and we know young people are more likely to work in this sector.
Those not in full time education or employment (NEET) have risen to just over 1 million, which reflects peak numbers to the previous economic crisis of 2008. From this recession we understand that NEET figures will not be revealed in the true nature or scale for some years.
The £3.06 billion investment in young people in the Plan for Jobs and the Opportunity Guarantee from the Prime Minister last summer shows the ambition of the Government and the investment should be commended. We would like to see more fiscal investment into the Kickstart, Restart, Apprenticeship, Traineeship and other programmes to really ensure that opportunities created are quality opportunities and that these programmes continue for as long as they need to be into 2021 and 2022.
The APPG for Youth Employment and the Youth Employment Group will be launching their report at the end of this week with recommendations for the Government to ensure that no young person is left behind, particularly the most disadvantaged groups, those with protected characters, and furthest away from the labour market have access to the opportunities that they need.
