Labour market update for London – October 2018
London employment rate steady, with further signs of rising wage growth nationally
Labour market data for the three-month period June to August 2018 was released today. The capital’s labour market remains healthy, with the employment and unemployment rates near record highs and lows respectively. There is further evidence that a ‘tightening’ labour market is feeding into higher pay increases at the national level. In nominal terms, annual pay growth rose to its highest rate since the financial crisis in the three months to August 2018, although in real terms (i.e. adjusting for price inflation) pay growth remains low.
- Estimates from the Labour Force Survey show that, between March to May 2018 and June to August 2018, the number of London residents in work rose slightly, the number of unemployed residents decreased but the number of people aged from 16 to 64 years who are economically inactive (i.e. not working and not seeking or available to work) increased.
- In total, there were 4.75 million London residents aged 16+ in work between March to May 2018, up by 28,000 on the previous quarter. At the same time, there were 237,000 unemployed residents aged 16+ (those not in work but seeking and available to work), and 1.31 million aged from 16 to 64 years who were economically inactive.
- As reported in last month’s update, there were 5.92 million jobs in London in June 2018 (a new high), up 14,000 on the quarter and 88,000 on the year. The number of jobs in London grew 1.5% on the year: this was above the rate for the UK overall (0.4%), but slightly below the long-term average annual growth rate for London (1.8%).
- In terms of pay, at a national level nominal pay growth (both regular and total pay) increased in the latest data. In the three months to August 2018, regular pay increased 3.1% on the previous year – the annual growth rate for regular pay has not been higher since October to December 2008. However, it remains worth noting that in real terms (i.e. adjusting for inflation) annual pay growth in Great Britain was still only 0.7% in the latest data. On this basis, average weekly earnings are still below pre-recession levels.
- Please see the charts and tables below for more detail on these 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. 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 July 2018 was 74.8%, up 0.1 percentage points on the quarter, and down 0.2 percentage points on the year. The UK’s employment rate was 0.8 percentage points higher than London’s at 75.5%, down 0.1 percentage points on the quarter but up 0.4 percentage points on the year.
In the three months to July 2018 London’s ILO unemployment rate was 4.8%, down 0.4 percentage points on the quarter and 0.1 percentage points on the year, and close to record lows (4.7%). The UK unemployment rate remained lower than London’s at 4.0%, down 0.1 percentage points on the quarter and 0.3 percentage points on the year.
In the three months to July 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 21.4%, up 0.3 percentage points on the quarter and on the year. The UK’s rate of economic inactivity was slightly lower than London’s at 21.2%, and was up 0.2 percentage points on the quarter and 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 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.
Year-on-year jobs growth, London and the UK, 1997 to 2018 Q2
Source: ONS workforce jobs
Jobs growth in London by sector, past 12 months (2017-18 Q2) and previous (2016-17 Q2)
Source: ONS workforce jobs