The current position in the UK labour market

Employment rate 16-64 (%)

64

66

68

70

72

74

76

1971 1976 1981 1986 1991 1996 2001 2006 2011

The employment rate is at the same level as in 2010 but is higher than at previous troughs

The overall changes in ILO and claimant unemployment since 2008 have been similar

0

500

1,000

1,500

2,000

2,500

3,000

2008 2009 2010 2011 2012

ILO measure

Claimant count

Level of ILO and claimant unemployment (000s)

Claimants of non-JSA benefits (000s)

2,300

2,400

2,500

2,600

2,700

2,800

2,900

3,000

1998 2001 2004 2007 2010500

600

700

800

900

1,000

1,100

1,200

ESA/IB

Lone parents on IS

Welfare reform has been moving people back into the labour market from inactivity…

Total claiming the main out of work benefits (000s)

0

1,000

2,000

3,000

4,000

5,000

6,000

Feb-98 Feb-00 Feb-02 Feb-04 Feb-06 Feb-08 Feb-10 Feb-12

Incapacity benefits Lone parents JSA

…but the total claiming the main out of work benefits is 45,000 lower than in May 2010

0

50

100

150

200

250

300

350

400

450

500

Feb 2008 May 2010 Feb 2012

Training allowance

FJF

Over 12 months

6-12 months

Under 6 months

The recent rise in the youth claimant count is largely explained by policy changes

JSA aged 18-24 by duration, plus FJF and training allowances (000s)

Not in full-time education or work (000s)

• 1.4 million 16-24s not in work or full-time education. Most are NEET – not in work/training or any education - apart from some part-time students. But it’s a diverse group – many spend only a short time unemployed or are out of the workforce looking after children.

• Excluding students, youth unemployment is lower than previous peaks, both in absolute terms and as a proportion of the population.

• But this translates into a higher rate, because rising participation in education means the youth labour force is smaller than in the past.

5.9 million are working or in full-time study(80% of the age group)

Breakdown of 16-24s

Most under 25s are either full-time students, in work or in work-based learning

1.4 million have left full-time education and aren’t in work

Youth unemployment remains lower than after previous recessions

Looking after family

Disabled

Part-time study

< 6 months

6-12 months

> 12 months

Other reason

0

150

300

450

600

750

ILO unemployed Inactive

Part-time study

0

200

400

600

800

1,000

1,200

1983 1987 1991 1995 1999 2003 2007 2011

ILO unemployed, excluding students (000s)

Unemployed not FTE

Inactive not FTE

731,000

702,0007.3million

Work/trainingnot FTE

2.8 million

FTE and working819,000

Unemployed in FTE

311,

000

FTE and inactive

2million

Employment rate by gender (%) Female ILO unemployed level and rate (000s & %)

Change in labour market in last year (% points)

• The gender employment gap narrowed in the recession. After widening slightly as the male employment rate recovered in 2010, the position has stabilised with the gap just above the lowest on record.

• Female ILO unemployment rose by 22,000 this quarter to 1.13 million. But as the female labour force has grown over time the unemployment rate, at 7.7%, is lower than previous peaks.

• Compared to this time last year there are more women in employment, with the rate flat. But unemployment has also risen because more women are joining the labour force from inactivity.

The male/female employment rate gap has narrowed over time…

…and the female unemployment rate is lower than at past peaks

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

Employment Unemployment Inactivity

MaleFemaleAll

40

50

60

70

80

90

100

1971 1976 1981 1986 1991 1996 2001 2006 2011

Men Women

0200400600800

1,0001,2001,4001,600

1971 1976 1981 1986 1991 1996 2001 2006 201102468101214

Level Rate

Female unemployment is up on the year, driven by falling inactivity

SummarySome improvement since May 2010 – employment up 250,000Not yet rising fast enough to see significant recovery:

- population growing so employment rate broadly flat since 2010

Private sector employment up 635,000 since 2010, outstripping380,000 fall in public sector over the same periodSigns of stabilisation in recent figures despite unemploymentrising over the last year Policy changes have had a significant impact on unemployment:

- people no longer leave JSA automatically when they start a programme, so number of long-term claimants, especially young people, has inevitably risen- welfare reform means people previously economically inactive are joining JSA from other benefits, putting upward pressure on unemployment

- total claiming one of the main out of work benefits down 45,000 since 2010

300,000 unemployed 16-24 year olds are in full-time education:- taking this into account youth unemployment is lower than after the 1980s and 1990s recessions.