Economy tracker: Unemployment

Latest news:

The UK jobs market continued to improve in the three months to May, with unemployment falling to its lowest level in nearly six years.

The number of people out of work fell by 121,000 to 2.12 million over the period, the Office for National Statistics (ONS) said.,

This brings the unemployment rate down to 6.5% from 6.6% in April.

The number of people claiming Jobseeker's Allowance in June fell by 36,300 to 1.04 million, the ONS said.

Understanding unemployment:
  • A person is classed as unemployed if not only out of work, but also actively looking for work and available to start work within a fortnight
  • Unemployment figures are based on a survey carried out by the Office for National Statistics. They show the average number of people unemployed over a three-month period
  • A new survey is done every month, but comparisons are made between separate three-month periods, not overlapping ones. e.g. April-June v Jan-March, not April-June v March-May
  • The ONS also publishes the claimant count which shows the number of people receiving Jobseeker's Allowance (JSA) in a particular month. That figure comes from information supplied by the Department for Work and Pensions
  • The unemployment figure is higher than the claimant count as many jobseekers do not or cannot claim JSA
  • The two main measures can sometimes move in different directions. A change in benefits rules moving people on to JSA from another benefit, for example, would increase the claimant count without a corresponding increase in unemployment.
Background:

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Graduates at a job fair

Unemployment is referred to as a lagging indicator, because businesses will often delay laying people off as long as they can in difficult times.

A few months after the start of the recession in 2008, unemployment started to rise sharply. When the global financial crisis hit, the unemployment rate was a little over 5% or 1.6 million.

Towards the end of 2009, with the UK coming out of its severest recession since the 1950s, it was almost a million higher at 2.5 million, or 8%.

Unemployment peaked at almost 2.7 million at the end of 2011, its highest level for 17 years.

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