Many of the statistics presented here are estimates based on a survey, and as such have a margin of error – known as sampling variability

Summary of latest labour market data (1)

The employment rate in the capital remains high while unemployment is relatively stable. Overall, this suggests that the Government support is still mitigating the impact of COVID-19 on the labour market.

For London, in the three months to August 2020 compared against the previous quarter:

• The employment rate increased by 0.7 percentage points (pp) to 76.1%.
• The unemployment rate was 5.3%, unchanged on the quarter
• The economic inactivity rate fell to 19.8% (-0.6pp).

Experimental Claimant Count data covers claims for Jobseeker’s allowance and claimants on Universal Credit “searching for work”. Following the Government response to Covid-19, people on low incomes but still in work became eligible for unemployment related benefits and are included in these statistics. This data shows that in London:

• The number of claims has increased by 165% (305k) since March – higher than the UK increase (120%).
• Between August and September the number of claims in the capital went up by around 12.6k, the highest increase across UK regions.
• Workers aged 25-29 in saw the largest year on year increase in claims (+246%). All age groups in London experienced a larger proportional increase than their UK counterparts
• Among boroughs, Newham claims increased by most compared to the same period last year (+17.7k).
• Among parliamentary constituencies, West Ham claims increased by most compared to the same period last year (+9.5k), followed by Tottenham and East Ham.

It is worth noting that recent RF analysis  suggests that 61% of new UC claimants are either working, receiving furlough pay, or receiving an SEISS grant, according to the Understanding Society data.

Summary of latest labour market data (2)

The ONS has also published data on the number of PAYE employees, actual hours worked, vacancies and redundancies which overcome some of the data limitations that we discuss in Slide 4.

• For the first time we have early regional estimates on the number of payroll employees, showing that in September there were 146,000 fewer people in paid employment living in the capital relative to March 2020.
• In September, London experienced the largest regional decrease (3.5%) in employee growth compared to the same month last year.
• Between February to April 2020 and May to July 2020, total actual weekly hours worked in the UK increased by 20.0 million to 891.0 million hours.
• Redundancies in the UK nearly doubled relative to last year, up 113,000 to a total of 227,000.
• For July to September 2020, there were an estimated 488,000 job vacancies in the UK. Despite a record quarterly increase (144,000), the number of vacancies are still 40.5% lower than a year ago.

ONS headline indicators mostly refer to the lockdown period

Data for headline indicators cover up until the end of August. This relate to the period when a number of the government lockdown measures aimed at protecting businesses and jobs during the coronavirus pandemic started to be However, they still do not show the full impact of Covid-19 and this is for the same two reasons highlighted in previous labour market updates:

• The first relates to the way the data is collected. The Labour Force Survey (LFS) is the main source of employment data. This is the largest household survey that the ONS publishes – aside from the census – and interviews almost 80,000 adults every quarter to ask how much they have worked, how much they earn and whether those out of work are actively seeking a job. This is an extremely rich dataset but unfortunately it is not as timely as we would like it to be. The latest release only covers until the end of August and it does not account the latest policy and labour market developments. The chart on the LHS shows how much of the data in the LFS and other key datasets were impacted by the social distancing measures.
• The second relates to the measures used in relevant data. For example, the International Labour Organization (ILO) definition of employment used in the LFS includes those who worked in a job for at least one hour and those temporarily absent from a job. Workers furloughed under the CJRS or who are self-employed but temporarily not in work have a reasonable expectation of returning to their jobs after a temporary period of absence. Therefore they are classified as employed under the ILO definition and ONS estimates.

It is worth noting that  to mitigate the non-response bias due to change in interviewing methods during COVID, ONS has changed the weighting methodology for the LFS. This has resulted in revision to all estimates for the periods January- March to May-July.  In these slides we report the movements based on the new methodology.

Employment rate in London remains high

In the three months to August 2020, London’s 16-64 employment rate was estimated at 76.1%. This was up 0.7pp on the previous quarter and 1.9pp from the same quarter last year.

For the UK, the employment rate was estimated at 75.6%, down 0.3pp on the quarter, placing London’s increase at the top of all regions:

• The Yorkshire and the Humber, the West Midlands and Scotland saw small quarterly increases, but only London also had a large annual increase (1.9pp)
• The North East, East Midlands, South West and Wales all saw quarterly falls of over 1pp. The South West also had the largest annual fall (4pp)

Women made up 61% of the quarterly increase in the capital, up 44,000 for women and only 28,000 for men, reversing the trend from the March to June, where employment fell, driven by falls for women.

Employment rates by age are not seasonally adjusted, so comparisons are against the previous year:

• The 16-24 age group saw the only fall, down 4.0pp
• The 25-34 age group saw the largest increase (4.8pp), driven by a 6.6pp increase for women
• The employment rate for women increased most in age brackets 25-34 and 50-64 and for men in age bracket over 50. In the 35-49 bracket, there was a 2.5pp increase for women and a 2.2pp fall for men.

Source: ONS Labour Force Survey 2020

Unemployment rate in the capital remains relatively stable

The 16+ unemployment rate in the capital was 5.3% in the three months to August 2020, unchanged from the previous quarter but up 0.6pp from the previous year.

The UK unemployment rate was estimated at 4.5%, up 0.4pp from the previous quarter.

The number of people unemployed in London increased by 5,000 relative to last quarter (up 1.9%). This increase was the result of an increase of 20,000 for men, largely offset by a fall of 15,000 for women.

Comparisons of London’s unemployment rate by age against last year show:

• The largest increases were in the 16-24 and 25-34 age groups, up 2.8pp an 1.7pp, with the 16-24 group driven by a 5.0pp increase for men.
• Only the 35-49 group fell, down 0.2pp.

Source: ONS Labour Force Survey 2020

London’s inactivity rate continues to fall

In the three months to August 2020, the rate of economic inactivity in London was 19.8%, down 0.6pp on the previous quarter and 2.4pp on the year. Economic inactivity rate is the proportion of 16 to 64 year olds not in work and not looking for or not able to work.

The UK’s rate of economic inactivity was slightly higher at 20.8%, unchanged from the previous quarter.

Looking at the changes in inactivity by gender in the capital shows that women accounted for just over half of the decrease (down 20,000 out of 37,000 total).

Comparisons of London’s inactivity rate by age against last year show:

• Only the 16-24 age group increased, up 3.3pp, mostly driven by an increase for women.
• The largest fall was in the 25-34 group, down 6.6pp.
• Although the 35-49 group fell 0.1pp overall, it rose 2.4pp for men and fell 2.4pp for women. There was a corresponding increase in the employment rate for the same age group for women, indicating a move from inactivity to employment.

Source: ONS Labour Force Survey 2020

Claimant count in London is up 305k on March

Since March 2020, the number of claims by residents aged 16+ in the capital has gone up 165% (304,750), reaching a total of 489,800 claims. This was the highest regional proportional and nominal increase.

The In the UK, the claimant count has increased by 120% since March (almost 1.5 million). The capital accounted for around a fifth of this increase.

Between August and September, the number of claims increased in all UK regions except Wales and the South West, totalling 28,070. The number of claims in London increased by 12,620 – the highest in the UK.

Looking at claims by gender in the capital:

• Claims by men increased by 175% (178,080) compared to March – 3% (6,110) of this increase was seen between August and September.
• Claims by women rose by 152% (126,670) compared to March, with 5% (6,510) occurring between August and September.
• Overall, women accounted for 42% of the increase in claims since March in London, a higher share than in other UK regions.

Comparing September 2020 against September last year, workers aged 25-29 saw the largest proportional increase in claims in the capital (246%), followed by the 30-34 age group (221%). All age groups in London experienced a larger proportional increase than their UK counterparts (see chart).

Note that an increasing number of people became eligible for unemployment-related benefit support, although still employed. Consequently changes in the Claimant Count will not be due wholly to changes in the number of people who are unemployed.

Source: ONS Labour Market Statistics

Newham saw the largest increase in the number of claims

Within London, Newham was  the local authority with the largest year on year change (+17,750). Kensington & Chelsea had the smallest increase (+3,915) (excluding the City of London). See chart for more details.

Looking at the data by parliamentary constituency:

• West Ham had the largest year on year increase (+9,495), followed by Tottenham (+8,585), and East Ham (+8,250). Orpington had the smallest increase (+1,820).
• Tottenham saw the largest year on year increase in the share of working age residents claiming benefits (+8.6pp), followed by Brent Central (+8.0pp) and East Ham (+7.5pp). Richmond Park saw the smallest increase (+3.1pp) over the same period (excluding City of London & Westminster).

Looking at the number of claims by parliamentary constituency and age:

• West Ham saw the largest increase in the number of claims by 18-24 year old residents, followed by East Ham and Tottenham.
• The same parliamentary constituencies also saw the largest increases in claims by 25-49 year old residents.
• Brent Central had the largest increase in claims by residents aged 50+, followed by West Ham and Tottenham.

Note that an increasing number of people became eligible for unemployment-related benefit support, although still employed. Consequently changes in the Claimant Count will not be due wholly to changes in the number of people who are unemployed.

Source: ONS Labour Market Statistics

Top 5 Parliamentary constituencies by increase in claims

Change in number of claims and % of 16-64 residents claiming unemployment benefits, September 19 – September 20, by parliamentary constituency and age, Top 5/Bottom 5

Note that an increasing number of people became eligible for unemployment-related benefit support, although still employed. Consequently changes in the Claimant Count will not be due wholly to changes in the number of people who are unemployed.

Source: ONS Labour Market Statistics

The number of employees in London is falling

ONS has published data on number of employees on payroll, employee growth, redundancies and vacancies:

• Experimental monthly estimates of paid employees using HMRC PAYE data  are now available at the regional level. Since March 2020, of the 673,000 decrease in UK payroll employees, around 146,000 were living in London, the largest fall across UK regions. 
• In September, the number of employees fell 3.5% in London relative to September last year, the largest regional fall (see chart).
• Between March to April 2020 and June to August 2020, total actual weekly hours worked in the UK increased by 20.0 million to 891.0 million hours.
• Redundancies in the UK rose 113,000 on the year to a total of 227,000 – the largest annual increase since April-June 2009, and a record 114,000 on the quarter.
• For July to September 2020, there were an estimated 488,000 job vacancies in the UK. This was a record quarterly increase of 144,000 vacancies. However, vacancies remain well below the pre-COVID period and are 40.5% lower than a year ago.

Source: HM Revenue and Customs PAYE Real Time. Note: Estimates are based on where people live.

Summary of headline indicators for London and the UK

*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+.

Source: ONS Labour Force Survey 2020