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17 November 2004 - More people in work than ever before - Kennedy

Minister for Work, Jane Kennedy, today welcomed new statistics showing the continued success of the UK labour market. She said:

“These figures show employment at its highest ever level. The number of people in work has increased by over 200 thousand in the last twelve months and by more than 2 million in the last seven years.”

In the latest quarter the number of people in work in the UK was 28.43 million, up 55 thousand in the latest quarter and 232 thousand on a year ago.

The number of people unemployed on the ILO definition is now 1.38 million, a fall of 67 thousand this quarter and 109 thousand over the last year. The number unemployed and claiming Jobseeker’s Allowance rose 900 this month but has fallen by 88 thousand over the year to 836.7 thousand.

Jane Kennedy continued: “The rise in the number of people in work has been reflected in a significant fall in unemployment, down to its lowest level since 1975. Long-term unemployment is the lowest for over thirty years and long-term youth unemployment has been virtually eradicated.”

The improvement in the labour market also reflects lower economic inactivity. Although the number of people recorded as inactive – those who are not seeking or available to start a job - has risen by 305 thousand, to 7.9 million, over the last seven years, this is entirely due to population growth and a continued rise in the number of students. As a proportion of the population the inactivity rate has fallen slightly, from 21.6 per cent to 21.5 per cent, over the period. Excluding students, the improvement has been greater, with the inactivity rate down 0.7 percentage points of the population.

Jane Kennedy said: “The government’s policies are about extending employment opportunity to all. This has already been reflected in much lower unemployment and a fall in inactivity. Through continued economic stability, combined with the help on offer through Jobcentre Plus and programmes like the New Deal, our aim is to go even further in increasing employment and reducing the number of people who are not in work.”

Notes for editors

BACKGROUND TO LABOUR MARKET STATISTICS: NOVEMBER 2004

Compared to this time last year there are more people in work, the employment rate has risen and unemployment has fallen. Vacancies are at a historically high level and redundancies are around the lowest on record.

This month’s Labour Force Survey covers July to September 2004. The claimant unemployment count date was 14th October and the vacancy count date was 8th October.

In July to September 2004, employment rose by 55 thousand on the previous quarter and 232 thousand on the year. ILO unemployment was down in the latest quarter and on the year. Claimant unemployment was up slightly in the latest month but down on the year.

The labour market is in a strong position

  • There were 28.43 million people in work in July to September.
  • The LFS employment rate is 74.7%, up over the quarter and the year.
  • On both measures, recent unemployment rates are the best since 1975.
  • Both the ONS and Jobcentre Plus series show vacancies at high levels.
  • Over the last year the redundancy rate per thousand employees shows a fall of 1.0 to 5.5 per thousand employees.

Employment is up on the year and unemployment is down

  • Employment is up by 232 thousand over the last year.
  • The level of ILO unemployment in July to September was 1.380 million, down 67 thousand in the last three months and 109 thousand on this time last year. The ILO unemployment rate is 4.6%, down 0.2 percentage points from the previous quarter and down 0.4 percentage points on the same period a year ago.
  • The latest claimant count figures show 836.7 thousand claimants in October 2004, a rise of 900 on the month but a fall 87,900 on the year. The claimant unemployment rate, at 2.7%, is unchanged on the month and down 0.3 percentage points over the last year.
  • The proportion of the population who are economically inactive – those without work who are not actively seeking or available for work – is 21.5%, up 0.2 percentage points over the last year. About half this increase reflects a further rise in the number of students.

The number of people on out of work benefits is falling

  • The number of working age people on out of work benefits in May 2004 was 4.6 million, down 117 thousand over the last year. This is greater than the fall in unemployment-related benefits over the same period.
  • The number of lone parents on benefit in May 2004 was 788 thousand, down 38 thousand over the last year. The number of people claiming incapacity benefits in May 2004 was 2.7 million, down 4 thousand over the last year.

The number of vacancies remains high

  • ONS’s vacancy survey estimates there were 640.0 thousand unfilled vacancies in the quarter to September 2004, up 43.3 thousand (7.3%) on the same period last year.
  • Jobcentre vacancies in October 2004 averaged 85 thousand a week, the same as in October 2003. More than 10,000 new vacancies are placed at Jobcentres every working day and at least as many again come up through other recruitment channels.

Earnings growth in the year to September was 3.7%, down 0.1 points from August

  • Excluding bonuses, average earnings growth was 4.3%, unchanged from August.

FACT SHEET ON EMPLOYMENT, UNEMPLOYMENT AND INACTIVITY IN THE UK

The UK has one of the best labour markets in the world with good progress in employment, unemployment and inactivity (excluding students) since 1997. As the UK population is growing you would expect the total number in each of these categories to increase in size – that’s why it is important to look at the percentage of the population in each category.

Since 1997 employment has risen strongly, unemployment is down and total inactivity has fallen slightly…

  • Population has grown by 1.46 million, an increase of 4%.
  • Employment has increased by 2 million since the election to one of the highest employment rates on record (74.7%).
  • Unemployment has fallen by 670,000 to the lowest level for nearly 30 years and, along with Japan, the best unemployment rate in the G7 (4.6%).
  • The inactivity rate has fallen slightly from 21.6% to 21.5% but because the population has increased the total number that is inactive has increased by 305,000.

..and after taking account of the increased numbers in education the inactivity rate has fallen by 0.7%...

  • Most types of inactivity have grown at roughly the same rate as the working age population. The change over the seven years since 1997 has, with a few exceptions, been crowded in the range plus or minus 0.25 of a percentage point.
  • The major exception is the group who are not working because they are students. That group has increased by nearly 1 percentage point with an increasing number of people in education gaining skills for the future.
  • So if we exclude students, the inactivity rate has fallen by 0.7 percentage points.
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