UK Labour Market: July 2016

Between the 3 months to February 2016 and March to May 2016, the number of people in work increased. The number of unemployed people and the number of people not working and not seeking or available to work (economically inactive) fell.

There were 31.70 million people in work, 176,000 more than for the 3 months to February 2016 and 624,000 more than for a year earlier.

There were 23.19 million people working full-time, 401,000 more than for a year earlier. There were 8.52 million people working part-time, 223,000 more than for a year earlier.

The employment rate (the proportion of people aged from 16 to 64 who were in work) was 74.4%, the highest since comparable records began in 1971.

There were 1.65 million unemployed people (people not in work but seeking and available to work), 54,000 fewer than for the 3 months to February 2016, 201,000 fewer than for a year earlier and the lowest since March to May 2008.

There were 903,000 unemployed men, 108,000 fewer than for a year earlier. There were 742,000 unemployed women, 93,000 fewer than for a year earlier.

The unemployment rate was 4.9%, down from 5.6% for a year earlier. The last time it was lower was for July to September 2005. The unemployment rate is the proportion of the labour force (those in work plus those unemployed) that were unemployed.

There were 8.87 million people aged from 16 to 64 who were economically inactive (not working and not seeking or available to work), 46,000 fewer than for the 3 months to February 2016 and 181,000 fewer than for a year earlier.

The inactivity rate (the proportion of people aged from 16 to 64 who were economically inactive) was 21.6%, the lowest since comparable records began in 1971.

Average weekly earnings for employees in Great Britain in nominal terms (that is, not adjusted for price inflation) increased by 2.3% including bonuses and by 2.2% excluding bonuses compared with a year earlier.

Table 1 and Figure 1 show the latest estimates, for March to May 2016, for employment, unemployment and economic inactivity and shows how these estimates compare with the previous quarter (the 3 months to February 2016) and the previous year (March to May 2015). Comparing the estimates for March to May 2016 with those for the 3 months to February 2016 provides the most robust short-term comparison. See Section 3 of this statistical bulletin for more information.

Where to find explanatory information

Interpreting labour market statistics, originally published in 2012 and available on the National Archives website, is designed to help you interpret labour market statistics and highlights some common misunderstandings.

A more detailed Guide to labour market statistics, which includes a Glossary, is also available.

About labour market statuses

Everybody aged 16 or over is either employed, unemployed or economically inactive. The employment estimates include all people in work including those working part-time. People not working are classed as unemployed if they have been looking for work within the last 4 weeks and are able to start work within the next 2 weeks. A common misconception is that the unemployment statistics are a count of people on benefits; this is not the case as they include unemployed people not claiming benefits.

Jobless people who have not been looking for work within the last 4 weeks or who are unable to start work within the next 2 weeks are classed as economically inactive. Examples of economically inactive people include people not looking for work because they are students, looking after the family or home, because of illness or disability or because they have retired.

Explaining the concepts of employment, unemployment and economic inactivity is available from the National Archives website as a short video.

Making comparisons with earlier data derived from the Labour Force Survey

Estimates of employment, unemployment, economic inactivity, hours worked and redundancies are derived from the Labour Force Survey (LFS), a survey of households. The most robust estimates of short-term movements in these estimates are obtained by comparing the estimates for March to May 2016 with the estimates for the 3 months to February 2016, which were first published on 20 April 2016 and were revised in the May 2016 edition of this release. This provides a more robust estimate than comparing with the estimates for February to April 2016. This is because the March and April data are included within both estimates, so effectively observed differences are those between the individual months of February and May 2016. The LFS is sampled such that it is representative of the UK population over a 3 month period, not for single month periods.

Accuracy and reliability of survey estimates

Most of the figures in this statistical bulletin come from surveys of households or businesses and are therefore estimates rather than precise figures. Further information is available at Section 20 of this statistical bulletin.

Introduction

Employment measures the number of people in work and differs from the number of jobs because some people have more than one job. Further information is available at Notes for Employment at the end of this section.

A comparison between estimates of employment and jobs is available on our website.

Commentary

The proportion of people aged from 16 to 64 in work is known as the employment rate. Figure 2 shows the employment rates for people, men and women aged from 16 to 64 since comparable records began in 1971. The lowest employment rate for people was 65.6% in 1983, during the economic downturn of the early 1980s. The employment rates for people, men and women have been generally increasing since early 2012. For the latest time period, March to May 2016, the employment rate for people reached a record high of 74.4%.

Figure 3 looks in more detail at the employment rate for people for the last 5 years.

For March to May 2016, 74.4% of people aged from 16 to 64 were in work, the highest since comparable records began in 1971.

Looking at employment rates by sex, for March to May 2016:

• 79.2% of men and 69.6% of women aged from 16 to 64 were in work

• the employment rate for men (79.2%) was higher than for a year earlier (78.1%)

• the employment rate for women (69.6%) was the highest since comparable records began in 1971, partly due to ongoing changes to the state pension age for women resulting in fewer women retiring between the ages of 60 and 65

For March to May 2016, there were 31.70 million people in work, 176,000 more than for the 3 months to February 2016 and 624,000 more than for a year earlier.

Figure 4 shows how the estimates for full-time and part-time employment by sex for March to May 2016 compare with those for a year earlier.

Comparing the estimates for type of employment for March to May 2016 with those for a year earlier:

• employees increased by 319,000 to 26.71 million (84.2% of all people in work)

• self-employed people increased by 300,000 to 4.79 million (15.1% of all people in work)

• unpaid family workers increased by 11,000 to 116,000 (0.4% of all people in work); see Note 2 at the end of this section for an explanation of the coverage of this series

• people on government supported training and employment programmes were little changed at 94,000 (0.3% of all people in work); see Note 3 at the end of this section for an explanation of the coverage of this series

Where to find data about employment

Employment estimates are available at Tables 1 and 3 of the pdf version of this statistical bulletin and at datasets A02 SA and EMP01 SA.

International comparisons of employment rates are available at Table 19 of the pdf version of this statistical bulletin and at dataset A10.

Estimates for the number of people in employment and for the number of self-employed people back to 1855 (which do not have National Statistics status) have been published by the Bank of England in the spreadsheet Three centuries of data v2.2 (at columns H and N in worksheet 22).

Notes for Employment

1. Employment consists of employees, self-employed people, unpaid family workers and people on government supported training and employment programmes.

2. Unpaid family workers are people who work in a family business who do not receive a formal wage or salary but benefit from the profits of that business.

3. The government supported training and employment programmes series does not include all people on these programmes; it only includes people engaging in any form of work, work experience or work-related training who are not included in the employees or self-employed series. People on these programmes NOT engaging in any form of work, work experience or work-related training are not included in the employment estimates; they are classified as unemployed or economically inactive.

Introduction

Public sector employment measures the number of people in paid work in the public sector. The public sector comprises central government, local government and public corporations. Estimates of public sector employment are obtained from information provided by public sector organisations.

Private sector employment is estimated as the difference between total employment, sourced from the Labour Force Survey, and public sector employment.

Comparisons of public and private sector employment over time are impacted by changes to the composition of these sectors. For example, if a publicly owned body is privatised, public sector employment will fall and private sector employment will increase by an equivalent amount. This is known as a reclassification effect. At Table 4 of the pdf version of this statistical bulletin and at dataset EMP02 we therefore publish estimates of public and private sector employment excluding the effects of major, but not all, reclassifications alongside estimates of total public and private sector employment.

Commentary

There were 5.35 million people employed in the public sector for March 2016. This was:

• slightly more (6,000) than for December 2015

• 21,000 fewer than for a year earlier

There have been 2 consecutive small quarterly increases in public sector employment. However, prior to these 2 small quarterly increases, the number of people employed in the public sector had been generally falling since March 2010.

There were 26.24 million people employed in the private sector for March 2016. This was 50,000 more than for December 2015 and 482,000 more than for a year earlier.

For March 2016, 16.9% of people in employment worked in the public sector, the lowest proportion since comparable records began in March 1999. The remaining 83.1% worked in the private sector.

Figure 5 shows public sector employment as a percentage of all people in employment for the last 5 years.

Comparisons of public and private sector employment over time are complicated by several large employers moving between the public and private sectors. We therefore publish estimates of public and private sector employment excluding the effects of major reclassifications alongside estimates of total public and private sector employment at Table 4 of the pdf version of this statistical bulletin and at dataset EMP02.

Where to find data about public and private sector employment

Public and private sector employment estimates are available at Tables 4 and 4(1) of the pdf version of this statistical bulletin and at datasets EMP02 and EMP03.

Further information on public sector employment is available in the Public sector employment release.

Introduction

These estimates show the number of people in work and changes in the series show net changes in the number of people in work (the number of people entering employment minus the number of people leaving employment). The number of people entering or leaving employment are larger than the net changes. The estimates therefore do not relate to “new jobs” and cannot be used to estimate the proportion of new jobs that have been filled by UK and non-UK workers. It should also be noted that the estimates of the number of people in work differ from the number of jobs because some people have more than one job.

The estimates are not seasonally adjusted and it is therefore best practice to compare the estimates for January to March 2016 with those for a year earlier rather than with those for October to December 2015.

The estimates for EU nationals and people born in the EU working in the UK, since the start of the time series in 1997, are based on the current membership of the EU.

Commentary

Looking at the estimates by nationality, between January to March 2015 and January to March 2016:

• UK nationals working in the UK increased by 185,000 to 28.15 million

• non-UK nationals working in the UK increased by 229,000 to 3.34 million

Looking at changes in non-UK nationals working in the UK between January to March 1997 (when comparable records began) and January to March 2016:

• the number of non-UK nationals working in the UK increased from 928,000 to 3.34 million

• the proportion of all people working in the UK accounted for by non-UK nationals increased from 3.5% to 10.6%

• this increase in non-UK nationals working in the UK reflects the admission of several new member states to the European Union (EU)

Looking in more detail at non-UK nationals working in the UK, between January to March 2015 and January to March 2016:

• non-UK nationals from the EU working in the UK increased by 224,000 to 2.15 million

• non-UK nationals from outside the EU working in the UK were little changed at 1.19 million

Figure 6 shows the number of non-UK nationals from EU and non-EU countries working in the UK from January to March 1997 (when comparable records began) to January to March 2016.

As shown in Figure 6, since January to March 2009, the number of non-UK nationals from outside the EU working in the UK has been broadly flat but the number of non-UK nationals from EU countries working in the UK has continued to increase.

For January to March 2016, there were 5.24 million people born abroad working in the UK, but the number of non- UK nationals working in the UK was much lower at 3.34 million. This is because the estimates for people born abroad working in the UK include some UK nationals. Looking at the estimates by country of birth, between January to March 2015 and January to March 2016:

• UK born people working in the UK increased by 94,000 to 26.25 million

• non-UK born people working in the UK increased by 330,000 to 5.24 million

Where to find data about employment by nationality and country of birth

Estimates of employment by nationality and country of birth are available at Table 8 of the pdf version of this statistical bulletin and at dataset EMP06.

Introduction

Actual hours worked measures the number of hours worked in the economy. Changes in actual hours worked reflect changes in the number of people in employment and the average hours worked by those people.

Commentary

Total hours worked per week were 1.02 billion for March to May 2016. This was:

• 3.9 million more (0.4%) compared with the 3 months to February 2016

• 19.7 million (2.0%) more than for a year earlier

Between the 3 months to February 2016 and March to May 2016, the number of people in work increased by 176,000 (as explained at Section 4 of this statistical bulletin) but average hours worked per week fell slightly.

For March to May 2016:

• people worked, on average, 32.1 hours per week, down slightly compared with the 3 months to February 2016 but unchanged compared with a year earlier

• people working full-time worked, on average, 37.5 hours per week in their main job, unchanged compared with the 3 months to February 2016 but up slightly compared with a year earlier

• people working part-time worked, on average, 16.1 hours per week in their main job, down slightly compared with the 3 months to February 2016 and with a year earlier

Figure 7 shows total hours worked and the number of people in work, as indices, for the last 5 years.

Where to find data about hours worked

Hours worked estimates are available at Tables 7 and 7(1) of the pdf version of this statistical bulletin and at datasets HOUR01 SA and HOUR02 SA.

Estimates for average weekly hours worked back to 1855 (which do not have National Statistics status) have been published by the Bank of England in the spreadsheet Three centuries of data v2.2 (at column Q in worksheet 22).

Introduction

Workforce jobs measures the number of filled jobs in the economy. The estimates are mainly sourced from employer surveys. Workforce jobs is a different concept from employment, which is sourced from the Labour Force Survey, as employment is an estimate of people and some people have more than one job.

A comparison between estimates of employment and jobs is available on our website.

Commentary

For March 2016 there were 34.26 million workforce jobs, 186,000 more than for December 2015 and 429,000 more than for a year earlier. Figure 8 shows changes in the number of jobs by industrial sector between March 2015 and March 2016.

Looking at a longer term comparison, between June 1978 (when comparable records began) and March 2016:

• the proportion of jobs accounted for by the manufacturing and mining and quarrying sectors fell from 26.3% to 8.0%

• the proportion of jobs accounted for by the services sector increased from 63.2% to 83.1%

While comparable estimates for workforce jobs by industry begin in 1978, some historical information back to 1841, not comparable with the latest estimates, are available from 2011 Census Analysis, 170 years of industry.

Where to find data about workforce jobs

Jobs estimates are available at Tables 5 and 6 of the pdf version of this statistical bulletin and at datasets JOBS01 and JOBS02.

Introduction

Average Weekly Earnings measures money paid to employees in Great Britain in return for work done, before tax and other deductions from pay. The estimates do not include earnings of self- employed people. Estimates are available for both total pay (which includes bonuses) and for regular pay (which excludes bonus payments). Estimates are available in both nominal terms (not adjusted for consumer price inflation) and real terms (adjusted for consumer price inflation). The estimates are not just a measure of pay settlements as they also reflect compositional changes within the workforce. Further information is available at Notes for Average Weekly Earnings at the end of this section.

Commentary

For May 2016 in nominal terms (that is, not adjusted for price inflation):

• average regular pay (excluding bonuses) for employees in Great Britain was £471 per week before tax and other deductions from pay, up from £461 per week for a year earlier

• average total pay (including bonuses) for employees in Great Britain was £502 per week before tax and other deductions from pay, up from £492 per week for a year earlier

Between March to May 2015 and March to May 2016, in nominal terms, regular pay increased by 2.2%, little changed compared with the growth rate between February to April 2015 and February to April 2016 (2.3%).

Between March to May 2015 and March to May 2016, in nominal terms, total pay increased by 2.3%, higher than the growth rate between February to April 2015 and February to April 2016 (2.0%).

Figure 9 compares the annual growth rates for both regular and total pay, in nominal terms, for the last 5 years.

Looking at longer term movements, since comparable records began in 2000 average total pay for employees in Great Britain in nominal terms increased from £311 a week in January 2000 to £502 a week in May 2016; an increase of 61.2%. Over the same period the Consumer Prices Index increased by 39.6%.

Between March to May 2015 and March to May 2016 in real terms (that is, adjusted for consumer price inflation) regular pay for employees in Great Britain increased by 1.8% and total pay increased by 1.9%.

A more detailed analysis of earnings growth in real terms is available at Supplementary Analysis of Average Weekly Earnings.

Where to find data about average weekly earnings

Estimates of average weekly earnings in nominal terms (that is, not adjusted for consumer price inflation) are available at Tables 15, 16 and 17 of the pdf version of this statistical bulletin and at datsets EARN01, EARN02 and EARN03.

Estimates of average weekly earnings in real terms (that is, adjusted for consumer price inflation) are available at Table 18 of the pdf version of this statistical bulletin and at dataset EARN01.

While comparable records for average weekly earnings start in 2000, modelled estimates of average weekly earnings in nominal terms back to 1963 (which do not have National Statistics status) are available at dataset EARN02.

Estimates back to 1750 (which do not have National Statistics status) have been published by the Bank of England in the spreadsheet Three centuries of data v2.2 (at column G in worksheet 21).

Where to find more information about earnings

A supplementary analysis of Average Weekly Earnings which includes estimates of real earnings (that is, adjusted for consumer price inflation) is available on our website.

An article looking at bonus payments was published on 26 August 2015.

The Annual Survey of Hours and Earnings (ASHE), published on 18 November 2015, provides more detailed data for 2015.

Notes for Average Weekly Earnings

1. The estimates relate to Great Britain and include salaries but not unearned income, benefits in kind or arrears of pay.
2. As well as pay settlements, the estimates reflect bonuses, changes in the number of paid hours worked and the impact of employees paid at different rates joining and leaving individual businesses. The estimates also reflect changes in the overall structure of the workforce; for example, more low paid jobs in the economy would have a downward effect on the earnings growth rate.
3. Lloyds Banking Group plc is reclassified to the private sector from April 2014 following the sale of some government owned shares to private sector investors. It is classified to the public sector between July 2009 and March 2014. We estimate that, if the April 2014 reclassification had not occurred, the public sector single month growth rates between April 2014 and March 2015 would have been around 0.3 percentage points higher and the corresponding private sector growth rates would have been around 0.1 percentage points lower.

Introduction

Labour disputes estimates measure strikes connected with terms and conditions of employment.

Commentary

For May 2016:

• there were 22,000 working days lost from 18 stoppages

• 11,000 people took strike action

• most of the working days lost were due to disputes in the Education sector

For the 12 months ending May 2016:

• there were 251,000 working days lost from 103 stoppages

• 79,000 people took strike action

Since monthly records began in December 1931:

• the highest cumulative 12 month estimate for working days lost was 32.2 million for the 12 months to April 1980

• the lowest cumulative 12 month estimate for working days lost was 143,000 for the 12 months to March 2011

Working days lost are at historically low levels when looking at the long run monthly time series back to the 1930s, available at dataset LABD01.

Figure 10 shows cumulative 12 month totals for working days lost for the last 5 years.

Where to find data about labour disputes

Labour disputes estimates are available at Table 20 of the pdf version of this statistical bulletin and at dataset LABD01.

Where to find more information about labour disputes

The labour disputes annual article provides more detailed information. The most recent edition of this article was published on 16 July 2015. The next edition will be published on 2 August 2016.

Introduction

Unemployment measures people without a job who have been actively seeking work within the last 4 weeks and are available to start work within the next 2 weeks.

The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed. This follows guidelines specified by the International Labour Organisation and it ensures that UK unemployment rates are broadly comparable with those published by other countries.

Commentary

The proportion of economically active people aged 16 and over who are out of work and seeking work is known as the unemployment rate. As shown at Figure 11 (which shows unemployment rates for people, men and women), the lowest unemployment rate for people recorded since comparable records began in 1971 was 3.4% in late 1973 to early 1974 and the highest rate, 11.9%, was recorded in 1984 during the downturn of the early 1980s. The unemployment rate for people for the latest time period, March to May 2016, was 4.9%. It has not been lower since July to September 2005.

Figure 12 looks in more detail at the unemployment rate for people for the last 5 years.

The unemployment rate for those aged 16 and over for March to May 2016 was 4.9%. This was:

• lower than for the 3 months to February 2016 (5.1%)

• lower than for a year earlier (5.6%)

The unemployment rate has not been lower since July to September 2005.

For March to May 2016, there were:

• 1.65 million unemployed people, 54,000 fewer than for the 3 months to February 2016 and 201,000 fewer than for a year earlier

• 903,000 unemployed men, 25,000 fewer than for the 3 months to February 2016 and 108,000 fewer than for a year earlier

• 742,000 unemployed women, 29,000 fewer than for the 3 months to February 2016 and 93,000 fewer than for a year earlier

Looking at unemployment by how long people have been out of work and seeking work, for March to May 2016, there were:

• 950,000 people who had been unemployed for up to 6 months, 26,000 fewer compared with a year earlier

• 235,000 people who had been unemployed for between 6 and 12 months, 64,000 fewer than for a year earlier

• 461,000 people who had been unemployed for over 12 months, 110,000 fewer than for a year earlier

Where to find data about unemployment

Unemployment estimates for the UK are available at Table 9 of the pdf version of this statistical bulletin and at dataset UNEM01 SA.

Estimates for the unemployment level and rate back to 1870 (which do not have National Statistics status) have been published by the Bank of England in the spreadsheet Three centuries of data v2.2 (at columns P and U in worksheet 22).

International comparisons of unemployment rates are available at Table 19 of the pdf version of this statistical bulletin and at dataset A10.

Introduction

The Claimant Count measures the number of people claiming unemployment related benefits:

• between January 1971 (when comparable estimates start) and September 1996 it is an estimate of the number of people who would have claimed unemployment related benefits if Jobseeker's Allowance had existed at that time

• between October 1996 and April 2013 the Claimant Count is a count of the number of people claiming Jobseeker’s Allowance (JSA)

• from May 2013 the Claimant Count includes all out of work Universal Credit claimants as well as all JSA claimants

Ideally only those Universal Credit claimants who are out of work and required to seek work should be included in the Claimant Count but it is not currently possible to produce estimates on this basis. The Claimant Count therefore currently includes some out of work claimants of Universal Credit who are not required to look for work; for example, due to illness or disability.

The Claimant Count estimates are currently designated as experimental statistics because the Universal Credit estimates are still being developed by the Department for Work and Pensions. However the Claimant Count estimates do provide the best available estimates of the number of people claiming unemployment related benefits in the UK.

The Claimant Count includes people who claim unemployment related benefits but who do not receive payment. For example some claimants will have had their benefits stopped for a limited period of time by Jobcentre Plus. Some people claim JSA in order to receive National Insurance Credits.

Commentary

Figure 13 shows the Claimant Count since comparable records began in 1971. It shows that the lowest number of people claiming unemployment related benefits was 422,600 in December 1973 and the highest figure was 3.09 million in July 1986. For the latest month, June 2016, there were 759,100 people claiming unemployment related benefits.

Looking in more detail at the most recent 5 years, Figure 14 shows the Claimant Count for people from June 2011 to June 2016.

For June 2016 there were 759,100 people claiming unemployment related benefits. This consisted of:

• 590,200 people claiming Jobseeker’s Allowance

• 168,900 people who were out of work and claiming Universal Credit

For June 2016 there were 759,100 people claiming unemployment related benefits. This was:

• little changed compared with May 2016

• 33,900 fewer than for a year earlier

For June 2016 there were:

• 482,500 men claiming unemployment related benefits, little changed compared with May 2016 but 27,600 fewer than for a year earlier

• 276,600 women claiming unemployment related benefits, little changed compared with May 2016 but 6,300 fewer than for a year earlier

Where to find data about the Claimant Count

Claimant Count estimates are available at Table 10 of the pdf version of this statistical bulletin and at dataset CLA01.

While comparable records start in 1971, some data back to 1881 (which do not have National Statistics status) are available from the “Historic Data” worksheet within dataset CLA01.

Unemployment is measured according to internationally accepted guidelines specified by the International Labour Organisation (ILO). Unemployed people in the UK are:

• without a job, have actively sought work in the last 4 weeks and are available to start work in the next 2 weeks

• out of work, have found a job and are waiting to start it in the next 2 weeks

People who meet these criteria are classified as unemployed irrespective of whether or not they claim Jobseeker’ s Allowance (JSA) or other benefits. The estimates are derived from the Labour Force Survey and are published for 3 month average time periods.

The Claimant Count measures the number of people claiming unemployment related benefits. As explained at Section 12 of this statistical bulletin, the Claimant Count estimates are designated as experimental statistics. In this section of the bulletin we compare quarterly movements in unemployment with quarterly movements in the Claimant Count. Some claimants will not be classified as unemployed. For example, people in employment working fewer than 16 hours a week can be eligible to claim JSA depending on their income.

Figure 15 and dataset X05 compare quarterly movements in unemployment and the Claimant Count for the same 3 month average time periods. The unemployment estimates shown in this comparison exclude unemployed people aged between 16 and 17 and 65 and over as well as unemployed people aged from 18 to 24 in full-time education. This provides a more meaningful comparison with the Claimant Count than total unemployment because people in these population groups are not usually eligible to claim unemployment related benefits.

When 3 month average estimates for the Claimant Count are compared with unemployment estimates for the same time periods and for the same population groups (people aged from 18 to 64 excluding 18 to 24 year olds in full-time education), between the 3 months to February 2016 and March to May 2016:

• unemployment fell by 58,000

• the Claimant Count increased by 7,000

Introduction

Economically inactive people are not in employment but do not meet the internationally accepted definition of unemployment because they have not been seeking work within the last 4 weeks and/or they are unable to start work within the next 2 weeks.

Commentary

The proportion of people, aged from 16 to 64, not in work and neither seeking nor available to work is known as the economic inactivity rate. Figure 16 shows that, since comparable records began in 1971, the economic inactivity rate for people has been generally falling (although it increased during economic downturns) due to a gradual fall in the economic inactivity rate for women. The economic inactivity rate for men has been gradually rising. For March to May 2016:

• the inactivity rate for people was 21.6%, the lowest since comparable records began in 1971

• the economic inactivity rate for men was 16.4%

• the economic inactivity rate for women was 26.9%, the lowest since comparable records began in 1971

Figure 17 looks in more detail at the economic inactivity rate for people since comparable records began in 1971. The economic inactivity rate for people increased during the downturn of the early 1980s reaching a record high of 25.9% in 1983. As the economy improved in the late 1980s, it resumed its downward path before the economic downturn of the early 1990s drove it back up again. Following an increase in the economic inactivity rate during the economic downturn of 2008 to 2009, it again resumed a generally downward path and for the latest time period, March to May 2016, it reached a record low of 21.6%.

For March to May 2016, there were 8.87 million people aged from 16 to 64 not in work and neither seeking nor available to work (known as economically inactive). This was:

• 46,000 fewer than for the 3 months to February 2016

• 181,000 fewer than for a year earlier

• the lowest since May to July 2003

Looking in more detail at the 8.87 million people aged from 16 to 64 who were economically inactive for March to May 2016, the 2 largest categories were students and people looking after the family or home (each of which accounted for just over a quarter of the total):

• there were 2.31 million people who were not looking for work because they were studying, 17,000 fewer than for a year earlier

• there were 2.23 million people (of which 1.98 million were women) who were not looking for work because they were looking after the family or home, 48,000 fewer than for a year earlier

The third and fourth largest categories were long-term sick (23.1% of the total) and retired (12.9% of the total):

• there were 2.05 million people who were not looking for work due to long-term sickness, 21,000 fewer than for a year earlier

• there were 1.14 million people who were not looking for work because they had retired, 123,000 fewer than for a year earlier

As shown in Figure 18, which shows the 4 largest categories of economic inactivity for the last 5 years, the number of people younger than 65 in the retired category has been generally falling since late 2011. This is largely due to ongoing changes to the state pension age for women resulting in fewer women retiring between the ages of 60 and 65.

Where to find data on economic inactivity

Economic inactivity estimates are available at Tables 1 and 13 of the pdf version of this statistical bulletin and at datasets A02 SA and INAC01 SA.

Introduction

This section looks at people aged from 16 to 24. It is a common misconception that all people in full- time education are classified as economically inactive. This is not the case as people in full-time education are included in the employment estimates if they have a part-time job and are included in the unemployment estimates if they are seeking part-time work.

Commentary

For March to May 2016, for people aged from 16 to 24, there were:

• 3.96 million people in work (including 931,000 full-time students with part-time jobs)

• 617,000 unemployed people (including 215,000 full-time students looking for part-time work)

• 2.64 million economically inactive people, most of whom (2.03 million) were full-time students

Figure 20 shows how the latest estimates, for March to May 2016, for employment, unemployment and economic inactivity for people aged from 16 to 24 compare with the previous quarter (the 3 months to February 2016) and the previous year (March to May 2015).

For March to May 2016, the unemployment rate for 16 to 24 year olds was 13.5%, lower than for a year earlier (15.7%). It has not been lower since July to September 2005 (when it was 12.7%).

The unemployment rate for those aged from 16 to 24 has been consistently higher than that for older age groups. Since comparable records began in 1992:

• the lowest youth unemployment rate was 11.6% for March to May 2001

• the highest youth unemployment rate was 22.5% for late 2011

Between March to May 1992 (when comparable records began) and March to May 2016 the proportion of people aged from 16 to 24 who were in full-time education increased substantially from 26.2% to 44.0%. This increase in the number of young people going into full-time education has reduced the size of the economically active population (those in work plus those seeking and available to work) and therefore increased the unemployment rate (because the unemployment rate is the proportion of the economically active population who are unemployed).

Where to find data on young people in the labour market

Estimates for young people in the labour market are available at Table 14 of the pdf version of this statistical bulletin and at dataset A06 SA.

Where to find more information about young people in the labour market

Estimates for young people who were Not in Education, Employment or Training (NEET) for January to March 2016 were published on 26 May 2016.

Introduction

The redundancies estimates measure the number of people who have been made redundant or have taken voluntary redundancy.

Commentary

For March to May 2016, 104,000 people had become redundant in the 3 months before the Labour Force Survey interviews. This was 8,000 fewer than for the 3 months to February 2016 and 15,000 fewer than for a year earlier.

Figure 21 shows the number of redundancies since comparable records began in 1995.

Where to find data on redundancies

Redundancies estimates are available at Tables 23 and 24 of the pdf version of this statistical bulletin and at datasets RED01 SA and RED02.

Introduction

Vacancies are defined as positions for which employers are actively seeking to recruit outside their business or organisation.

Commentary

There were 747,000 job vacancies for April to June 2016. This was 10,000 fewer than for January to March 2016 but 15,000 more than for a year earlier.

Figure 22 shows the number of job vacancies since comparable records began in 2001.

There were 672,000 job vacancies in the services sectors for April to June 2016, accounting for almost 90% of all vacancies. Looking at services in more detail, the sectors with the largest number of job vacancies were wholesaling, retailing and repair of motor vehicles (142,000) and human health and social work (118,000).

Where to find data about vacancies

Vacancies estimates are available at Tables 21, 21(1) and 22 of the pdf version of this statistical bulletin and at datasets VACS01, VACS02 and VACS03.

Introduction

Main out of work benefits includes claimants of unemployment related benefits and Employment and Support Allowance and other incapacity benefits. It also includes claimants of Income Support and Pension Credit. While most people claiming these benefits are out of work a small number are in employment. These estimates exclude claimants in Northern Ireland.

The estimates are not seasonally adjusted and it is therefore best practice to compare the estimates for November 2015 with those for a year earlier rather than with those for August 2015.

Commentary

For November 2015 there were 3.71 million people claiming main out of work benefits. This was:

• 195,600 fewer than for a year earlier

• the lowest since comparable records began in 1999

For November 2015, 9.3% of the population aged from 16 to 64 were claiming main out of work benefits. This was:

• down from 9.8% for a year earlier

• the lowest since comparable records began in 1999

Figure 23 shows, for the last 5 years, the proportion of the population aged from 16 to 64 claiming main out of work benefits.

Where to find data about main out of work benefits

Estimates of claimants of main out of work benefits are available at Table 11 of the pdf version of this statistical bulletin and at dataset BEN01.

Estimates for the most recent time periods are subject to revision due to the receipt of late and corrected responses to business surveys and revisions to seasonal adjustment factors which are re- estimated every month. Estimates are subject to longer run revisions, on an annual basis, resulting from reviews of the seasonal adjustment process. Estimates derived from the Labour Force Survey (a survey of households) are usually only revised once a year. Revisions to estimates derived from other sources are usually minor and are commented on in the statistical bulletin if this is not the case. Further information is available in the labour market statistics revisions policy.

One indication of the reliability of the main indicators in this statistical bulletin can be obtained by monitoring the size of revisions. Datasets EMP05, UNEM04, JOBS06 and CLA03 record the size and pattern of revisions over the last five years. These indicators only report summary measures for revisions. The revised data itself may be subject to sampling or other sources of error. Our standard presentation is to show 5 years worth of revisions (60 observations for a monthly series, 20 for a quarterly series).

Most of the figures in this statistical bulletin come from surveys of households or businesses. Surveys gather information from a sample rather than from the whole population. The sample is designed to allow for this, and to be as accurate as possible given practical limitations such as time and cost constraints, but results from sample surveys are always estimates, not precise figures. This means that they are subject to some uncertainty. This can have an impact on how changes in the estimates should be interpreted, especially for short-term comparisons.

We can calculate the level of uncertainty (also called “sampling variability”) around a survey estimate by exploring how that estimate would change if we were to draw many survey samples for the same time period instead of just one. This allows us to define a range around the estimate (known as a “confidence interval”) and to state how likely it is in practice that the real value that the survey is trying to measure lies within that range. Confidence intervals are typically set up so that we can be 95% sure that the true value lies within the range – in which case we refer to a “95% confidence interval”.

For example, the unemployment rate for March to May 2016 was estimated to be 4.9%. This figure had a stated 95% confidence interval of +/- 0.2 percentage points. This means that we can be 95% certain that the true unemployment rate for March to May 2016 was between 4.7% and 5.1%. However, the best estimate from the survey was that the unemployment rate was 4.9%.

The number of people unemployed for the same period was estimated at 1,646,000, with a stated 95% confidence interval of +/- 70,000. This means that we can be 95% certain that the true number of unemployed people was between 1,576,000 and 1,716,000. Again, the best estimate from the survey was that the number of unemployed people was 1,646,000.

As well as calculating precision measures around the numbers and rates obtained from the survey, we can also calculate them for changes in the numbers. For example, for March to May 2016, the estimated change in the number of unemployed people since the 3 months to February 2016 was a fall of 54,000, with a 95% confidence interval of +/- 77,000. This means that we can be 95% certain the actual change in unemployment was somewhere between a fall of 131,000 and an increase of 23,000, with the best estimate being a fall of 54,000. As the estimated fall in unemployment of 54,000 is smaller than the confidence interval of 77,000, the estimated fall in unemployment is said to be “not statistically significant”.

Working with uncertain estimates

In general, changes in the numbers (and especially the rates) reported in this statistical bulletin between 3 month periods are small, and are not usually greater than the level that is explainable by sampling variability. In practice, this means that small, short-term movements in reported rates (for example within +/- 0.3 percentage points) should be treated as indicative, and considered alongside medium and long-term patterns in the series and corresponding movements in administrative sources, where available, to give a fuller picture.

Seasonal adjustment and uncertainty

Like many economic indicators, the labour market is affected by factors that tend to occur at around the same time every year; for example school leavers entering the labour market in July and whether Easter falls in March or April. In order to compare movements other than annual changes in labour market statistics, such as since the previous quarter or since the previous month, the data are seasonally adjusted to remove the effects of seasonal factors and the arrangement of the calendar. All estimates discussed in this statistical bulletin are seasonally adjusted except where otherwise stated. While seasonal adjustment is essential to allow for robust comparisons through time, it is not possible to estimate uncertainty measures for the seasonally adjusted series.

Where to find data about uncertainty and reliability

Dataset A11 shows sampling variabilities for estimates derived from the Labour Force Survey.

Dataset JOBS07 shows sampling variabilities for estimates of workforce jobs.

The sampling variability of the 3 month average vacancies level is around +/- 1.5% of that level.

Sampling variability information for Average Weekly Earnings growth rates are available from the “Sampling Variability” worksheets within datasets EARN01 and EARN03.