London and UK labour market remains steady

 The ONS today released labour market data for the three months to October 2019. The latest figures show that London’s labour market remained steady during the three months to October. In real terms, growth in regular pay for employees across the UK slowed down to 1.7% on the previous year, down from 1.9% in the previous quarter.

• London’s 16-64 employment rate was 74.8%, up by 0.5 percentage points on the quarter but down by 0.7 percentage points on the year. For the UK as a whole the employment rate stood at 76.2%, virtually unchanged on the quarter, and up by 0.4 percentage points on the year.

• The unemployment rate (the number of unemployed people as a percentage of the labour force) in the capital was5%, which was virtually unchanged both on the quarter and on the year. The UK unemployment rate was 3.8%, unchanged on the quarter but down 0.3 percentage points on the year.

• London’s 16-64 economic inactivity rate was estimated at 21.7%, 0.4 percentage points lower than the previous quarter but 0.9 percentage points higher than a year earlier. The UK inactivity rate was 20.8%, unchanged on the quarter but down 0.2 percentage points on the year.

• The latest earnings data for Great Britain shows that estimated average annual growth in weekly earnings for employees slowed to 3.2% for total pay (including bonuses) and 3.5% for regular pay. In real terms (after adjusting for inflation), total pay has grown by 1.5% and regular pay by 1.8%.

• Provisional workforce jobs data shows that there were 6.1 million jobs in London in the third quarter of 2019 – an increase of 118,000 jobs or 1.9% on the previous year. This was broadly in-line with the UK growth rate over the same period (1.8%) and the London average over the past two decades (also 1.8%).

• Among London’s sectors, “Professional, scientific & technical activities” saw the highest annual growth in jobs (+47,000), followed by “Construction” (+26,000). In contrast, “Wholesale & retail” workforce jobs fell on the previous year (-16,000), along with “Admin & support service activities” jobs (-13,000).

• The ONS recently published new analysis of job quality in the UK. This exploratory work takes a first look at three indicators of employee job quality – working hours, contract type, and low pay – using experimental data from the Annual Population Survey. It shows that in 2018:
• Almost all employees (98%) living in London had a contract type they were satisfied with, similar to other parts of the UK. Yet among 14 city regions London had the second-highest rate of resident employees working unsatisfactory hours (especially high among managers, directors & senior officials) and the third-highest rate working in relative low pay (on a local definition).
• When combining these three indicators into one compositive measure, and defining low pay using two-thirds of the local median, only 61% of employees living in London had ‘quality work’ – the second-lowest rate among city regions, and significantly below the UK average (67%). Job quality also varies between population groups, including by age and ethnicity.

Please see the charts and tables below for more detail on headline labour market data.

Note on interpreting labour market data: many of the statistics presented here are estimates based on a survey, and as such have a margin of error – known as sampling variability. For example, a sampling variability of 0.1 and an estimated value of 2% would mean that if the survey was carried out 100 times, then in 95 of these the value would be between 1.9% and 2.1%. Changes in the headline indicators for London, and the gap between London and the UK are often within the survey’s margin of error, meaning they are not statistically significant and may not reflect real changes / differences.

Headline labour market data – employment rate, unemployment rate, and economic inactivity rate

Note: charts show seasonally adjusted data.

London’s employment rate (i.e. the proportion of London’s residents aged 16-64 population in employment) in the three months to October 2019 was 74.8%, up 0.5 percentage points on the  quarter but down 0.7 percentage points on the year. The UK’s employment rate stood at 76.2%,  unchanged on the quarter but up 0.4 percentage points on the year.

In the three months to October 2019 London’s ILO unemployment rate was 4.5%, virtually unchanged on the quarter and on the previous year. The UK’s unemployment rate was 0.7 percentage points lower than London’s, at 3.8%, unchanged on the quarter and down 0.3 percentage points on the year.

In the three months to October 2019 the rate of economic inactivity in London (the proportion of 16 to 64 year olds not in work and not looking for or not able to work) was 21.7%, down 0.4 percentage points on the previous quarter but up 0.9 percentage points on the year. The UK’s rate of economic inactivity stood at 0.9 percentage points lower than London’s at 20.8%, virtually unchanged on the previous quarter, but down 0.2 percentage points on the year.

Headline labour market data for London and the UK

*All figures are seasonally adjusted. Rates are based on working age (16 – 64 male and female), with the exception of the unemployment rate which is age 16+. We are no longer including a table with the claimant count (the number of people claiming unemployment benefits). The roll out of Universal Credit has caused problems with this statistic. In September 2017 we provided a briefing.  

Jobs charts

 Year-on-year jobs growth (%), London and the UK, 1997 to 2019 Q3

Source: ONS workforce jobs

Jobs growth in London by sector, last 12 months (2018-19 Q3) and previous (2017-18 Q3)

Source: ONS workforce jobs