14 March 2012 – Grayling: Signs of labour market stabilising – big challenge still ahead

There are further signs that the labour market is stabilising despite the tough economic climate, according to new figures published by the Office for National Statistics today.

Although unemployment showed a rise of 28,000 compared to the previous quarter, it was 5,000 below the headline figure published last month.

Private sector job creation also outstripped public sector job losses. An extra 45,000 people are now in private sector employment compared to the previous quarter, while public sector employment fell by 37,000.

The number of people in employment rose by 9,000 compared to the previous quarter, with 29.129m people now in work. There are over 250,000 more people in work compared to May 2010.

The number of women in work rose 10,000 this quarter to 13.5 million. Female unemployment also rose because more women are entering the labour market having previously been inactive.

There was also a small drop in the number of young people claiming Jobseekers Allowance, with 480,300 18 to 24-year-olds now claiming the benefit – 900 fewer than the previous month. Excluding students, the number of 16 to 24-year-olds classed as unemployed on the broader ILO definition was broadly flat at 731,000.

The statistics also reveal there are a significant number of jobs available, with 473,000 unfilled vacancies, up 15,000 on the previous quarter.

Employment Minister Chris Grayling said:

“This is a more encouraging set of figures, with signs that the labour market is stabilising, but there is clearly still a big challenge ahead to bring down unemployment and get people back to work.

“The international economic outlook remains difficult but we will do everything we can to help the unemployed find jobs.”

As the Government continues to reform the welfare system there are about 45,000 fewer people claiming out of work benefits compared to May 2010. In January there were 4.73million people on either Jobseekers Allowance, Employment and Support Allowance, Incapacity Benefit or lone parents on income support, down from 4.78million in May 2010.

Today’s figures show the number of people classed as economically inactive – meaning they are not employed or seeking work – fell again this quarter, down by 27,000. These figures come at a time when lone parent and sickness benefits are being reformed to support people to move back into the labour market.

Unemployment in the UK remains below the European Union average while employment remains above the EU average. While ILO unemployment is 8.4 per cent in the UK, it is 10 per cent in France, 23.3 per cent in Spain and 10.1 per cent across the EU as a whole.

Notes to Editors:

Background to labour market statistics: March 2012

This month's Labour Force Survey covers November 2011 to January 2012. The claimant count and Jobcentre Plus vacancy count dates were 9th and 3th February 2012 respectively.

The number of people in work rose this quarter

• 29.12 million people were in work in November to January 2012
• the employment level rose 9 thousand on the previous quarter but fell 44 thousand on the year.
• the employment rate is 70.3%, unchanged on the quarter and down 0.2 points on the year.
• The number of people working in the private sector rose 45,000 on the quarter and 226,000 on the year, to 23.2 million.
• The number working in the public sector fell 37,000 this quarter and 270,000 on the year, to 5.9 million.

ILO unemployment also rose this quarter as more people entered the labour force

• 2.64 million people were ILO unemployed in the November to January quarter, up by 28 thousand on the August to October period and up 148 thousand on the same quarter last year.
• the ILO unemployment rate is 8.4%, up 0.1 percentage points on the quarter and 0.4 points on the year.

The level of economic inactivity is down on the quarter and on the year

• the economic inactivity level is 9.30 million, down 27 thousand on the quarter and 30 thousand on the year.
• the economic inactivity rate is 23.1%, down 0.1 points on the quarter and on the year.
• excluding students, inactivity as a share of the 16-64 population is 17.4%, down 0.1 point on the quarter and 0.4 points on the year.

The number of people on Jobseeker’s Allowance rose again this month, but the number claiming one of the other main out-of-work benefits is improving

• claimant unemployment was 1,612 thousand in February 2012, up 7.2 thousand on the level in January, and up 162.1 thousand on the year.
• the claimant unemployment rate, at 5.0%, is unchanged on the month but up 0.5 points on the year.
• comparisons of claimant count figures over the last year, particularly long-term claimants, are affected by the impact of welfare reform. Changes to eligibility for income support mean there are more lone parents claiming JSA than a year ago, while the process to re-assess existing claims for incapacity benefits also is likely to be making some contribution to the rise in the JSA caseload.
• In addition, recent policy changes mean that individuals participating in government supported programmes now generally remain within the JSA figures until they find work. Previously those undertaking work experience or training were taken off the JSA caseload, and if they later made another claim their duration would start again from zero.
• in the year to August 2011, the number claiming incapacity benefits fell 24,000 to 2.58 million. The most recent provisional figure for January 2012 suggests the caseload has since fallen further to 2.55 million.
• in the year to August 2011, the number of lone parents on income support fell 80,000 to 595,300. Provisional figures for January 2012 suggest the number has fallen further in recent months, to 580,000, driven by welfare reform.

The number of redundancies and unfilled vacancies both rose on the quarter

• There were 173 thousand redundancies in November to January 2012, up 11 thousand on the previous quarter and 30 thousand on the year.
• ONS’s vacancy survey estimates an average of 473 thousand unfilled vacancies in the three months to February 2012, up 15 thousand on the quarter but down 20 thousand on the year. However, excluding the effect of the Census on last year’s figures, vacancies are up slightly on the year.

Total weekly pay in November to January 2012 was up by 1.4% over the year

• growth in regular weekly pay, excluding bonuses, was up 1.7% on the year.

Media Enquiries: 0203 267 5129
Out of hours: 07659 108 883
Website: www.dwp.gov.uk
Follow us on Twitter: www.twitter.com/dwppressoffice