Labour market update for London – August 2018

London employment rate down and economic inactivity up on the previous quarter

  • Labour market data for the three-month period April to June 2018 was released today.
  • The employment rate in London was down (-0.6 percentage points) on the quarter, and there was an increase (+0.7 percentage points) in the proportion of working age people not in the labour force (referred to as ‘economically inactive’). The unemployment rate in London was down (-0.1 percentage points) slightly on the quarter.
  • In the UK as a whole, there was no change in the employment rate on the quarter, but the unemployment rate fell slightly (-0.2 percentage points), and the economic inactivity rate fell slightly (-0.1 percentage points).
  • The ONS also published data on zero hours contracts today. In London there were 96,000 people employed on a zero hour contract in the three months to June 2018 (which equated to 2.0% of people employed), down 18% on the year from 117,000 (which equated to 2.5% of people employed in the three months to June 2017). The number of people working on zero-hour contracts also fell in the UK as a whole, but less steeply (by 12%).
  • ONS jobs data was updated last month, and showed relatively strong jobs growth in London compared to the UK as a whole. There were 5.9 million jobs in London in the first quarter of 2018, up 111,000 on the year (an increase of 1.9%, compared to 0.5% in the UK overall).
  • At a national level, ONS data showed that the number of EU nationals working in the UK fell by 86,000 in the three months to June 2018, the largest fall since records began in 1997, and also that there were 51,000 more vacancies in the UK in July than a year earlier, reaching the highest point since records began in 2001.

New data on pay

HMRC have recently started publishing ‘real time information’ (RTI) pay data for regions. This gives data up to Jan-Mar 2018, whereas the existing source, ASHE, only covers up to April 2017. According to this new data, in Jan-Mar 2018 median nominal pay in London (i.e. not adjusted for inflation) was 2.3% up on the previous year, compared to 2.0% in the UK overall. London recorded the highest pay increases of all UK regions and countries. This data, along with ASHE, does not cover self-employed people.

Note that, while this new source provides a welcome improvement in timeliness, ASHE remains the recommended source on regional pay. This new RTI data is classed as ‘experimental’, and should be used with caution.

Annual percentage change in PAYE pay
Nominal, not seasonally adjusted

Note on interpreting labour market data: many of the statistics presented here (for example, the employment rate and unemployment rate) are estimates based on a survey, and as such have a margin of error. Changes in the headline indicators for London, and the gap between London and the UK as a whole, are typically within this 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 June 2018 was 74.6%, down 0.6 percentage points on the quarter, but up 0.2 percentage points on the year. The UK’s employment rate was unchanged on the quarter at 75.6%, 1 percentage point above London.

In the three months to June 2018 London’s ILO unemployment rate was 4.9%, down 0.1 percentage points on the quarter and 0.6 percentage points on the year. The UK unemployment rate was lower than London’s at 4.0%, down 0.2 percentage points on the quarter and 0.4 percentage points on the year.

In the three months to June 2018 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 21.5%, up 0.7 percentage points on the quarter, and slightly above the 21.2% in the UK.

 

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 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

 Jobs growth, year on year, in London and the UK, 1997 to 2018

Source: ONS workforce jobs

Jobs growth in London by sector, past year (2017-18 Q1) and previous year (2016-17 Q1)

Source: ONS workforce jobs