Labour Market Statistics, May 2021

 | Institute for Employment Studies | May 2021

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Today’s data gives the clearest indication yet that the labour market is turning the corner.  Employee jobs rose by nearly 100 thousand in April, the fastest growth since 2015 and bringing employee numbers back to the levels of last summer; while vacancies in April were back close to pre-crisis levels and unemployment fell again, to 4.8%.  This employment growth is being driven by new job starts, with flows data from the Labour Force Survey suggesting that flows into work from worklessness are holding up reasonably well.

However, there remain three significant concerns in today’s figures:

■   Long-term unemployment is continuing to rise sharply – at its fastest rate since 2010, and with long-term unemployment for young people and those aged over 50 both hitting their highest in five years.  It looks increasingly likely that the lasting scars from this crisis will be felt in long-term unemployment.

■   Young people are continuing to suffer most in this crisis – accounting for nearly two thirds of the fall in PAYE employment and none of the growth since November.

■   There are signs that involuntary part-time and temporary employment are both on the rise – with the latter also reaching its highest in five years.  Temporary work is generally elevated, and being driven by fixed term contracts, although under-employment (those wanting and available for more hours) fell back slightly during the third lockdown.

Today also sees publication of quarterly data on employment for ethnic minority groups and for disabled people.  While the signs are that the employment rate ‘gaps’ for these groups have remained stable or fallen, it is also a timely reminder that disabled people in particular continue to face significant structural barriers in accessing employment – with barely half of all disabled people in work, and disabled people more than twice as likely to be out of work as those who are not disabled.

Looking ahead, with Jobcentre Plus getting back to normal running as the economy reopens, and the £7 billion investment in new employment support starting to come on stream, it will be imperative that we mobilise support for those out of work as quickly as possible and that we target that on those facing the most significant disadvantages in the labour market.