UK Employment Data For May To July Gives Mixed Signals Amid Brexit Uncertainty

UK Employment Data For May To July Gives Mixed Signals Amid Brexit Uncertainty

On September 10, 2019 the Office for National Statistics released estimates of employment, unemployment and economic inactivity for the period May to July 2019. Rate of employment in the UK was estimated at 76.1%, the recorded estimate was the highest since comparable records started in 1971 and was also 60bps higher against the year-ago period’s estimate of 75.5%.  The unemployment rate during the period under consideration was estimated at 3.8%, unchanged on a quarter-on-quarter basis and down slightly from 4.0% estimated in the year-ago period. Economic inactivity during the May to July 2019 period stood at 20.8%, which was approximately 40bps lower against the year-ago period and at par with the previous quarter estimates.

Employment Analysis

In the UK, employment data measures the number of people in the age group between 16 and 64 years who have joined the workforce. Since early 2012, the estimated number of men and women in the age group of 16 to 64 years, employment rates have generally seen an improving trend, and in the May to July quarter of 2019, the employment rate of men was estimated at 80.2%, improving by 10bps on a YoY basis but declined by 10bps on a quarter-on-quarter basis.  Women employment rate was estimated at 72.1%, which is at the joint-highest level since comparable records started in 1971 and 110bps higher against the year-ago period respectively. Increased employment rate estimates for women was somewhat driven by the amendments made in the State Pension age for women, resulting in lesser women retiring between the age group of 60 to 65 years.

Source: ONS

The combined estimated employment rate during the May to July quarter of 2019 was at 76.1%, this was also the joint highest estimate since comparable records started in 1971 and 60bps higher on a YoY comparable basis.

During the May to July quarter, people of age group between 35 to 49 years secured highest employment estimates of 85.4% and for those aged between 25 to 35 years, employment estimates stood at 84.3%, while the employment rate of those between 50 to 64 years stood at 72.7%, which was a record high.

The recent employment estimate also reveals that approximately 32.78 million people of the age group 16 years and above are contributing to the workforce, which was approximately 235,000 higher than a year-ago period. This was broadly driven by the increased number of women in the current workforce, which increased by 284,000 to 15.52 million during the year-ago period. However, male employment has also recorded growth of 86,000 to 17.26 million during the year-ago period, led by an increased number of self-employed men.

Unemployment Analysis

In the United Kingdom, unemployment data measures the number of people who don’t have jobs but are actively looking for work for the last four weeks and those who will be available to join the workforce within the next two weeks. The unemployment rate is defined as a proportion of the total population who don’t have work and proportion of people effectually eyeing for the job and are available to join the workforce in the next two weeks.

In the May to July quarter of 2019, the unemployment rate among men was estimated at 3.8%, which was marginally below the year-ago period rate of 4% and women unemployment rate was estimated at 3.4%, which stood at record low since comparable records started in 1971 and 40bps lower against the year-ago period estimate of 4.0% respectively. This made a combined estimated unemployment rate at 3.8% lower on a YoY basis.

However, the estimated unemployment rate on a collective basis declined to 3.8% from 6.1% estimated five year-ago, the estimated unemployment rate in men declined to 4.0% from 6.4% recorded five years back, and the unemployment rate in women stood at 3.6% from 5.8% recorded five years ago.

During May to July quarter under consideration, approximately 1.29 million people had no jobs, the numbers were 64,000 lowers than a year-ago period, and over the past five years, they have declined by 716,000. Also, people who were unemployed for up to six months in the last five years have narrowed by 182,000 to 786,000 people, and number of people who remained unemployed for a period between six to twelve months reduced by 138,000 to 180,000.

Economic inactivity analysis

In the United Kingdom, the measurement of economic inactivity rate covers the group of people who don’t have jobs but cannot be classified as unemployed because they are not actively looking for work, since last four weeks and also are not ready to join the workforce within next two weeks. ONS headline measure for economic inactivity is people who are in the age group between 16 and 64 years.

During the period under consideration, the overall inactivity rate for the people aged between 16 and 64 years stood at 20.8%, which was 50bps lower against the year-ago period. Also, the estimated inactivity rate for men declined by 10bps point to 16.4% on a YoY basis, and estimated economic inactivity rate for women was at 25.2%, which was 80bps lower against the year-ago period.

During the May to July 2019 period, ONS estimates also revealed that approximately 8.59 million people aged between 16 to 64 years are economically inactive. The number witnessed reduction 171,000 lesser against the year-ago period, and 487,000 less than the period five year-ago. However, the steep reduction in economic inactivity over the last five years on account of 464,000 fall in economic inactive women, whereas men contribution was very marginal at 23,000 only.

Brexit Update

Scotland’s highest court of appeal rebuffed Boris Johnson’s proposal to keep the parliament suspended for five weeks and termed it unlawful. House of Commons was prorogued or suspended, on September 09, until October 14, 2019, a move opposition criticized that it was designed to prevent their attempts to investigate his plans for crashing out of the European Union and empower him to exercise a no-deal Brexit. Meanwhile, some media reported that, out of the three major options facings British Prime Minister Mr Johnson, the most likely is that he will step down from his position to allow someone else to negotiate  with the European Union for the further extension of the Brexit which is scheduled to take place on October 31, 2019, which is the only feasible option for the British Prime Minister now.

Since Boris Johnson was sworn in as British Prime Minister and had witnessed a number of political adversities in the British Parliament until now but he had fared better in court with victories in London and at a lower court in Edinburgh. The threat of prorogation jolted the opposition Labour parliamentarian and a group of Conservative insurgents into passing a bill compelling the prime minister to push back the date when the UK crash out of the EU bloc if it can’t get a deal done with the EU.

Facebook Comments