London and UK labour markets remain tight as wage growth increases

 The ONS today released labour market data for the three months to June 2019. London’s labour market was relatively stable in this time, with employment and unemployment largely unchanged. The UK employment rate returned to its record high. Meanwhile, a tight labour market, along with new living wage and minimum wage rates, continued to feed into higher wage growth.

• In the three months to June 2019 there were 4.7 million Londoners in work. This was up by 34,000 on the previous year. At the same time, there were 222,000 unemployed residents and just over 1.3 million economically inactive working age residents.

• London’s 16-64 employment rate was 74.7%, down 0.3 percentage points on the quarter and up 0.1 percentage points on the year. For the UK as a whole the employment rate rose by 0.6 percentage points on the year, returning to its joint record high of 76.1%.

• Female employment rates have been growing in London and the UK in recent years, with the UK rate hitting a record high of 72.1% in the three months to June 2019. In the same period the female employment rate for London was 69.0%, close to its record high of 69.3% in the previous quarter.

• London’s unemployment rate (the number of unemployed people as a percentage of the labour force) stood at 4.5%, marking a fall of 0.3 percentage points on the previous year. The UK unemployment rate was 3.9%, which was virtually unchanged on the previous year (-0.1 percentage point).

• Data for Great Britain shows that average regular weekly earnings for employees increased by 3.9% on the previous year. After adjusting for inflation this is an increase of 1.9%. The faster rate of wage growth was partly due to public sector pay rises and new National Living Wage and Minimum Wage rates. Despite this, the level of average weekly earnings is still lower than before the 2008/09 recession.

• The ONS has recently released data on workless households for UK regions in 2018. Overall London had a lower share of workless households compared to the UK average with local authorities in the capital recording some of the lowest rates of worklessness in the country.
  • Across London, 11.8% of non-student households were workless (meaning they included at least one person aged 16 to 64 years and where no-one aged 16 years or over is in work) compared to 14.1% for the UK as a whole. Within the capital, the share of workless households varied from a low of 5.6% in Harrow to a high of 19.1% in Kensington and Chelsea.
  • For all workless households in London (including student households), the most common reason for people aged 16-64 being workless was disability or sickness (29.3%). Study and looking after the family were the next most common reasons (each 17.6%), followed by unemployment (16.0%). Compared to other regions, London had the highest rates of worklessness due to unemployment or study and the lowest rate due to early retirement (8.9%).

• Please see the charts and tables on the following pages for more detail on headline labour market data.

 

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- 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 typically 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 June 2019 was 74.7%, down 0.3 percentage points on the quarter and up 0.1 percentage points on the year. The UK’s employment rate was 1.4 percentage points higher than London’s at 76.1%, unchanged on the quarter and up 0.6 percentage points on the year.

In the three months to June 2019 London’s ILO unemployment rate was 4.5%, up 0.2 percentage points on the quarter and down 0.3 percentage points on the year. The UK’s unemployment rate stood at 3.9%, up 0.1 percentage points on the quarter and down 0.1 percentage points on the year.

In the three months to June 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%, up 0.1 percentage points on the quarter and up 0.2 percentage points on the year. The UK’s rate of economic inactivity stood at 20.7%, down 0.1 percentage points on the quarter and 0.5 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 Q1

Source: ONS workforce jobs

Jobs growth in London by sector, last 12 months (2018-19 Q1) and previous (2017-18 Q1)

Source: ONS workforce jobs