The continued strength of the labour market was welcomed by Minister for Work, Nick Brown. The latest UK Labour Market Statistics show that employment has risen by 13,000 in the last three months and by 190,000 over the last year.

The ILO unemployment rate remained unchanged on the quarter at 5 per cent, down from 5.3 per cent this time last year. The claimant count rate has fallen to 3.1 per cent on the month, down from 3.5 per cent last year. The number of claimants is down 6,000 over the month and 111,000 on the year. It is now at 945,600, its lowest level for nearly 26 years – since October 1975.

Nick Brown said, “Today’s figures show that the UK labour market remains in a strong position, with historically high employment and low unemployment.

“At a time of global economic slowdown, we understand the difficulties faced by some parts of the economy. But we know there are also new jobs coming up all the time, as the number of new vacancies at Jobcentres remains high. Our policies and programmes aim to increase opportunities to work. That means helping those who have recently lost their jobs, as well as those who have been out of work long-term.”

The figures show the number of people in work is 28.16 million. The employment rate now stands at 74.6 per cent, 0.2 percentage points lower than the previous quarter. The ILO unemployment level is 1.49 million, up by 13,000 on the previous three months, but down 87,000 on the year.

The Employment Service’s new system for collecting vacancies, Employer Direct, has increased the number of vacancies recorded. But even allowing for this effect, ES data indicate that new vacancies notified to Jobcentres are higher than this time last year.

The headline average earnings growth rate was 4.6 per cent in the three months to July, down 0.1 percentage points on the June figure.

Background to the labour market statistics

September 2001

The labour market remains strong, with employment at near record levels and unemployment at a 25 year low. Employment continues to grow, though there is uncertainty about the rate of growth. Claimant unemployment continues to fall. The level of ILO unemployment rose slightly over the quarter, though the ILO unemployment rate was unchanged. Both measures of unemployment show significant falls over the last year.

The roll-out of Employer Direct has affected the vacancy figures, which are not published as National Statistics this month.

Employment Service data suggest that the level of new vacancies remains high.

Annual earnings growth was 4.6 per cent in May to July, down 0.1 percentage points from last month’s (revised) figure of 4.7 per cent.

Employment is growing, though there is uncertainty about the rate of growth

• In May to July LFS employment grew by 13 thousand, compared to 67 thousand the previous quarter. LFS employment is at near record levels – up by 191 thousand over the last year to 28.155 million.
  
• The Workforce Jobs series is also showing job growth – up by 56 thousand in the three months to June 2001, compared to 8 thousand over the previous 3 months. There are 29.3 million Workforce jobs, an increase of 165 thousand over the last year.

Claimant unemployment continues to fall. ILO unemployment was broadly flat this quarter. There is little sign of a pick up in the rate of job losses

• The claimant count fell by 6,000 in August 2001. The rate was 3.1 per cent, compared to 3.2 per cent last month and 3.5 per cent in August last year.
  
• The average fall in claimant unemployment over the past 3 months has been 10,000. The number of claimants is the lowest since October 1975 and the rate the lowest since August 1975.
  
• ILO unemployment rose by 13,000 over the May to July quarter, to 1.49 million. The ILO unemployment rate – which ONS see as the best measure of the trend in unemployment – was unchanged at 5.0 per cent, down from 5.3 per cent this time last year.
  
• Previously published figures from the LFS show redundancies in spring 2001 were 169,000, 11,000 lower than in the same quarter last year. More recent claimant count figures are consistent with this picture. The number of people making a claim for unemployment-related benefit in August was 220,000. This is a historically low level and 16,000 fewer than in the same month last year.
  
• Over the last year the employment rise of 191 thousand was much larger than the fall in ILO unemployment of 87 thousand because the number of people in the labour force grew – by 104 thousand – as people who were previously outside the labour force have begun looking for work.

Employment Service data suggest the number of new vacancies remains high

• Notified vacancies remain at a high level. There were 231,200 vacancies notified to jobcentres in Great Britain in August 2001 (seasonally unadjusted). There is evidence however that this number has been influenced by the introduction of Employer Direct, which is a key element of plans to modernise the Employment Service, representing a major change from Jobcentre-based to Customer Service Centre (CSC) based vacancy management.
  
• Employer Direct is being introduced on a District-by-District basis. Rollout started during April 2001 and had reached over half of Employment Service Districts by August. The rollout process is expected to complete in the first few months of 2002.
  
• Because Employer Direct is being rolled out over time, there is information on what has happened to vacancies in areas so far unaffected by the change. Whilst it is not possible at present to make a precise adjustment to the series to allow for the Employer Direct effect, we can use this information to make broad judgements about the level and trend in new vacancies.
  
• Even in areas where Employer Direct has not been introduced, notified vacancies in August 2001 are at a slightly higher level than they were in August 2000. Data for May to July 2001 are shown in the table below, together with data from last year.