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The Mayor of London The London Assembly

Labour market update for London – May 2020

Most of the estimates presented in these slides cover up to March 2020 and account only for the first few weeks of the social distancing measures.

Summary of latest labour market data

  • The Office for National Statistics (ONS) have released their latest labour market estimates.
  • For London, in the three months to March 2020 (covering only the start of social distancing measures):
    • The employment rate rose to a record high of 76.9;
    • The unemployment rate rose slightly to 4.7%;
    • The economic inactivity rate fell to a record low of 19.4%.
  • Experimental Claimant Count data, which covers claims for Jobseeker’s allowance and those claimants in the UC “searching for work” shows that in London:
    • The number of claims in the capital has gone up by 63% on March;
    • Workers aged 25-29 saw the largest increase in claims (+91%);
    • Tower Hamlets experienced the largest year on year change in claims (+6,935);
  • Experimental data on monthly pay estimates using HM Revenue and Customs’ (HMRC’s) Pay As You Earn (PAYE) for employees paid in a given month show:
    • Since early 2019 the growth in the number of paid employees in the UK had been slowly declining (i.e. overall numbers had been steadying). Early estimates for April indicate growth becoming negative (i.e. total numbers declining);
    • Early estimates for median monthly pay in the UK also show a fall, continuing the trend from March (albeit it more sharply).

Employment rate in London hit record high

  • In the three months to March 2020, London’s 16-64 employment rate was estimated at 76.9%, the highest level since the series began (in 1992). This was up by 1.4 percentage points on the previous quarter and by 1.9 percentage points up on the year.
  • For the UKthe employment rate rose by 0.6 percentage points on the previous year, reaching 76.6%.

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

Source: ONS Labour Force Survey 2020

Unemployment rate in the capital was slightly up

  • The unemployment rate in the capital was 4.7%, 0.4 percentage points up on the quarter and 0.3 percentage points on the year.
  • The UK unemployment rate was estimated at 3.9%, virtually unchanged.

Source: ONS Labour Force Survey 2020

Inactivity rate in London continued falling

  • In the three months to March 2020 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 19.4%, down 1.7 percentage points on the previous quarter and 2.3 percentage points down on the year.
  • The UK’s rate of economic inactivity was slightly higher at 20.2%, down 0.3 percentage points on the previous quarter and 0.7 percentage points on the year.

Source: ONS Labour Force Survey 2020

The overall claimant count in London is up 117k on March

  • In April, the number of claims in the capital has gone up by 63% on March, reaching a total of 301,916 claims. This was the third smallest regional increase in proportional terms. In the UK, claimant count has gone up by 69% on the previous month.
  • Looking at claimant count by age groups in the capital shows that workers aged 25-29 saw the largest increase (+91%) between March and April, followed by 30-34 (80%) and 35-39 (72%).
  • Data on claimant count by local authority shows that within London, Tower Hamlets has experienced the largest year on year change (+6,935), followed by Croydon (+6,655) and Newham (6,645).

Source: ONS Labour Market Statistics

Pay growth in the UK has fallen recently, becoming negative in April 2020

  • Following a general trend of increasing pay growth, data for March and April 2020 show that pay growth in the UK may have slowed more substantially, (becoming negative in April according to early estimates) coinciding with the coronavirus (COVID-19) pandemic, as well as related economic and policy responses. Data for April is based on early data and subject to revision.
  • Growth in the number of employees began a downward trend in 2019. However, estimates for March and April 2020 indicate that employee growth in the UK slowed more substantially recently (becoming negative in April according to early estimates). Data for April is based on early data and subject to revision.
  • Compared with the same time last year, median pay in London grew by 3.29%. In the UK, this grew by 3.45%. This is based on an average of the three months to March.

Source: HM Revenue and Customs Pay As You Earn Real Time Information

Summary of headline indicators for London and the UK

Source: ONS Labour Force Survey 2020

*All figures are seasonally adjusted. Rates are based on working age (16 – 64 male and female), except for the unemployment rate which is age 16+.