Labour Market Statistics, March 2023
There is good news and bad in today’s figures. The good news is that employment is continuing to creep up and economic inactivity is edging down. Unemployment is also broadly flat, and remains close to its lowest in 50 years. This now looks like a pretty well-established trend since last summer, and in further good news today some of the early indicators of a potential slowdown that we had flagged in recent briefings appear to be easing – with redundancies and short-term unemployment both levelling off, and vacancies falling less steeply than they were in the latter part of last year.
However, today’s figures also show how bad news often comes in threes. First, the number of people economically inactive due to long-term ill health has risen again after a couple of months of falls. This is now up by half a million in four years, to just over 2.5 million people – the highest level since comparable records began in 1992.
Secondly, the employment recovery for older people has been very weak, especially for those aged 50-64. Employment fell over the last quarter for this group (again after an apparent recent improvement). Recent falls are being driven by fewer older men in work, but the longer-term picture is of flat or falling employment rates for both men and women aged 50-64, after decades of employment growth pre-pandemic (especially for women).
Thirdly, the number of young people outside of education or employment is rising. This is being fuelled in particular by large falls in the number of young people full-time education, with today seeing the largest quarterly fall on record (down by 150 thousand). Employment for young people outside of education is up slightly, but not by nearly enough to offset this decline. It is not clear what is driving this, but separate ‘NEET’ data suggests that it may be a combination of fewer young people aged 18-20 entering education, while those aged 21-22 are finding it harder to get jobs when they leave.
Importantly, all three of these issues are being driven primarily by fewer people entering work rather than more people exiting it; and emphasise why at the Budget tomorrow we need a comprehensive plan to raise participation and to support better work. We have set out that this should include action in four areas: better access to employment support; investment in local partnerships; support to address the costs of working; and a far more coherent ask and offer for employers.