London and UK employment rate remain high, with wage growth accelerating

 The ONS today released labour market data for the three months to May 2019. London’s labour market was relatively stable in this time, with employment largely unchanged and unemployment falling on the previous year. The UK employment rate was virtually unchanged from its record high. Meanwhile, a tight labour market combined with new living wage and minimum wage rates fed into continued wage growth.

• In the three months to May 2019 there were 4.7 million Londoners in work. This was up by 49,000 on the previous year. At the same time, there were 209,000 unemployed residents and just over 1.3 million economically inactive working age residents.

• London’s 16-64 employment rate was 75.0%, up 0.1 percentage points on the quarter and 0.4 percentage points on the year. For the UK as a whole, the employment rate saw a marginal change from the record high reported in the previous quarter, falling by 0.1 percentage points to 76.0%.

• In the year to March 2019, London’s employment growth was primarily driven by growth in the number of people in full-time and permanent work. Compared to the previous year, the number of people in full-time work increased by 1.8%, compared to 0.3% for part-time work. In the same period, the number of people working in temporary roles fell by 13.9%.

• London’s unemployment rate (the number of unemployed people as a percentage of the labour force) stood at 4.3%, marking a fall of 0.8 percentage points on the previous year. The UK unemployment rate was 3.8%, the lowest rate recorded since the three months to December 1974.

• UK data shows that average weekly earnings for employees (excluding bonuses) increased by 3.6% on the previous year. After adjusting for inflation this is an increase of 1.7%. Annual growth of both total and regular pay was 0.2 percentage points higher in March to May, than in February to April. This was in part due to public sector pay rises and the introduction of new National Living Wage and Minimum Wage rates.

• New research by the ONS has examined ethnicity pay gaps in the UK.
  • This work shows that, even when taking individual characteristics into account, there are some significant differences in median hourly pay between people from different ethnic backgrounds.
  • London has the largest ethnicity pay gap of any region in Great Britain, with employees from ethnic minority groups earning on average 21.7% less than white employees.
  • This is in line with statistics previously published as part of the London’s Economic Fairness Indicators. The reasons for the difference in the ethnicity pay gap between London and the UK are a potential area for future research.

• 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 May 2019 was 74.0%, up 0.1 percentage points on the quarter and up 0.4 percentage points on the year. The UK’s employment rate was 1 percentage point higher than London’s at 76.0%, down 0.1 percentage points on the quarter and up 0.4 percentage points on the year.

In the three months to May 2019 London’s ILO unemployment rate was 4.3%, down 0.2 percentage points on the quarter and down 0.8 percentage points on the year. The UK’s unemployment rate stood at 3.8%, down 0.1 percentage points on the quarter and 0.4 percentage points on the year.

In the three months to May 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 21.6%, down 0.1 percentage points on the quarter and up 0.3 percentage points on the year. The UK’s rate of economic inactivity stood at 20.9%, up 0.2 percentage points on the quarter and down 0.1 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