Monthly Labour Market Update
Hampshire
January 2017
National and regional headlines
· With the UK economy expanding by 0.6% in the final quarter of 2016 economic data has remained broadly encouraging following the EU referendum. Nevertheless, there are signs of weakening in the labour market in the latest official estimates.
· Wage growth was the weakest element of the UK recovery to date but the latest official data points to a small pick up in wages. Forward looking regional and national surveys on business activity and jobs growth in December 2016 are also encouraging.
· The number of people in employment in the UK in the three months to November decreased by 9,000 after decreasing by 6,000 in the three months to October. The small quarterly decrease in employment was driven by falling employment amongst men.
· Self-employed numbers decreased by 17,000 and the number of employees in employment fell by 8,000. The fall in this area was offset by small increases in employment among unpaid family workers and the number of people on government sponsored programmes. Part-time employment decreased on the quarter but the number of people working full time increased by 23,000. The number of job vacancies remained at 748,000, unchanged on the estimate reported last month.
· Total employment in the South East decreased by 2,000 compared to an increase of about 15,000 reported last month. Nevertheless, the employment rate in the South East increased by 0.2 percentage points to 78.2%, the highest in the country.
· The number of unemployed people in the UK on the headline survey-based measure decreased by 52,000 on the quarter after decreasing by about 16,000 in the three months to October. The unemployment rate decreased by 0.1 percentage point to 4.8%, the lowest rate since the three months to September 2005.
· Unemployment on the timelier but narrower measure which in addition to people claiming Job Seeker Allowance (JSA) includes people receiving Universal Credit (UC) decreased in December for the first time since July. Unemployment - adjusted for seasonal factors -decreased by about 10,100 in December compared to an increase of about 1,300 in November (revised downwards from previous estimate). The rate decreased from 2% to 1.9%.
· Unemployment on the broader survey-based (headline measure) in the South East decreased by 18,000 in the three months to November, compared to a fall of 2,000 reported the previous month. The unemployment rate decreased by 0.4 percentage points to 3.4%, the lowest headline unemployment rate in the country.
· Unemployment on the new experimental, timelier claimant count (JSA+UC) measure adjusted for seasonal factors in the South East decreased by about 700 in December, after decreasing by about 70 in November (revised downward from previous estimate). The claimant count rate adjusted for seasonal factors remained unchanged at 1.1% in December, the lowest in the country.
· The growth in total pay (including bonuses) increased to 2.8% in the three months to November compared to the same period a year ago. Regular pay growth (excluding bonuses) increased to 2.7%, from 2.6% reported last month. Average employee earnings excluding bonuses increased at the fastest rate for just over a year.
· Regular pay in the private sector increased by 3%, slightly faster than reported last month. Pay growth in the public sector increased by 1.4%, slightly slower than reported last month. Pay growth in services increased by 2.6%, marginally faster than last month with average pay in finance business increasing by 1.8%. Average pay growth in manufacturing increased by 2.1% and construction saw pay growth remain unchanged to 4.2%.
· The UK economy grew 0.6% in the final quarter of last year. Output growth was driven by the services sector but appeared more balanced than in Q3 (manufacturing and construction expanded on the quarter). The economy remains in a relatively good shape but the combination of slower employment growth, rising inflation, sluggish wage growth and subdued consumer and business sentiment implies that the economic environment is likely to become somewhat more challenging this year.
Headline annual data - Hampshire[i]
Employment
· The fall in employment in Hampshire County Council was sharper in the year to September 2016 than in the year to June 2016. The fall in employment was driven by falling self-employment. Rising number of employees in employment is a source of good news.
· In the year to September 2016 the number of 16-64 year olds in employment in the Hampshire County Council Area decreased by 2.1% or about 13,900 compared to the year to September 2015. The decrease in residence-based employment in Hampshire was faster than in the year to June 2016 (down 1.5%).
· The number of employees in employment in Hampshire increased by 0.7% or about 3,700 on the year, which is comparable to the year to September 2015 and a small improvement on the year to June 2016. The year to June 2016 saw a decrease in the number of employees in employment and self-employment.
· Another fall in self-employment pushed the overall numbers lower. Self-employment decreased by 17.9% or about 18,700 which is much larger than in June 2016 and in stark contrast to the year to September 2015 that saw strong growth in self-employment.
· The employment rate in Hampshire decreased by 2.3 percentage points, which was a faster decrease than elsewhere in the South East. At 79.5% the employment rate in Hampshire was unchanged on June and one of the highest employment rates in the South East.
Unemployment
· Unemployment on the headline (survey-based) measure in the Hampshire County Council Area increased in the year to September 2016 compared to the previous year according to the latest annual estimate from the Office for National Statistics (ONS). The increase in unemployment was significant and faster than elsewhere in the South East.
· The number of unemployed people in Hampshire increased by about 7,200 to 29,400 in the year to September 2016. The increase was larger than the increase recorded in the year to June 2016 (up 3,800) and the year to September 2015.
· The survey-based unemployment rate increased from 3.2% in the year to September 2015 to 4.3% in the year to September 2016. In the year to June 2016 the unemployment rate in Hampshire stood at 3.9%.
· At 4.3% the unemployment rate in Hampshire was comparable to the South East average but lower than the UK average (5.1%). The survey-based estimate of unemployment in Hampshire is slightly higher than the rates found in several other counties in the area.
· The unemployment rate in Hampshire is higher than in Enterprise m3 LEP (3.5%) but lower than the average rate found in Solent (5.4%).
Youth unemployment
· Youth unemployment appears to be a major contributing factor to the overall increase in unemployment in Hampshire in the year to September 2016 but this estimate needs to be treated with a degree of caution. The number of young unemployed people was similar to the estimate for the year to June 2016 but the rate was higher.
· The number of young unemployed people in the Hampshire County Council Area increased by about 2,100 to 10,400 in the year to September 2016 compared to the previous year. The increase in the number of young unemployed people was similar to the year to June 2016.
· The survey-based youth unemployment rate in Hampshire increased from 8.4% in the year to September 2015 to 11.3% in the year to September 2016. In the year to June 2016 the rate stood at 10.5%, compared to the previous year.
· At 11.3%, youth unemployment on the broader survey-based measure in Hampshire was well below the UK average (14%) and below the South East average (12.4%). The rate was comparable to the Berkshire average, lower than in Surrey but higher than in Oxfordshire or West Sussex.
· Youth unemployment in the Hampshire County Council Area in the year to September 2016 was marginally lower than in Enterprise m3 (11.8%) and lower than in Solent (14.2%).
Economic inactivity
· Economic inactivity is another area that saw a relatively sharp rise in the year to September 2016. The economic inactivity rate increased but the increase was not significant which implies that the rate remained broadly unchanged compared to the previous year.
· The numbers of economically inactive people in the Hampshire County Council Area increased by about 13,200 or 10.4% in the year to September 2016 compared to the previous year. The increase was similar to the increase observed in the year to June 2016.
· The economic inactivity rate in Hampshire in the year to September 2016 increased by 1.5 percentage points to 17% but the increase was not statistically significant. In the year to June 2016 the economic inactivity rate in Hampshire stood at 17.2%.
· Economic inactivity in the Hampshire County Council Area was after Oxfordshire (16.8%) the lowest in the South East. The rate remained well below the national and regional averages of 22.3% and 19.4% respectively, and below the rates found in Enterprise m3 and Solent LEPs (19.1% and 19.4% respectively).
Monthly claimant count unemployment - Hampshire
Claimant count unemployment
· The number of unemployed people on the new broader (JSA+UC) experimental claimant count measure not adjusted for seasonal factors in the Hampshire County Council Area decreased by 35 claimants to 5,900 in December 2016 after decreasing by 140 claimants in November (revised downwards from previous estimate).
· The numbers of unemployed people increased in Test Valley, Havant and New Forest, remained unchanged in Rushmoor, Winchester, Eastleigh and Hart and decreased in all other Hampshire districts last month. The largest decrease was in Gosport with 45 fewer claimants and the largest increase in Havant with 25 additional claimants.
· The unemployment rate on the new seasonally unadjusted measure (JSA+UC) in the Hampshire County Council Area remained unchanged at 0.7% in December. The claimant count unemployment rate decreased in the UK to 1.7%, it edged higher in East Sussex and remained unchanged across all counties in the South East.
· The claimant count unemployment rate decreased in Basingstoke and Gosport and remained unchanged in all districts in the Hampshire County Council Area in December. The claimant count unemployment rate in Enterprise m3 remained unchanged at 0.6% but the Solent rate increased to 1.2% last month.
Claimant count youth unemployment
· The number of young unemployed people on the new broader (JSA+UC) seasonally unadjusted experimental claimant count measure in the Hampshire County Council Area decreased by 15 claimants to 1,310 in December after decreasing by 20 claimants in the previous month (revised downwards from previous estimate).
· The numbers of young unemployed people decreased in Basingstoke, Rushmoor, Test Valley, East Hampshire, Fareham and Gosport, remained unchanged in Winchester and edged higher in all other Hampshire districts in November. The largest monthly increase was recorded in New Forest (10 additional claimants) and the largest decrease in Gosport (20 fewer claimants last month).
· The unemployment rate on the new headline measure (JSA+UC) for the 16-24 age group is not available but a proxy estimate suggests that the rate remained unchanged at 1% in December. The South East rate remained unchanged at 1.3% but the UK rate decreased to 2.3%. The unemployment rate fell in Buckinghamshire and remained unchanged in all other counties in the South East last month. Youth unemployment on the narrower JSA measure in the Hampshire County Council Area remained unchanged at 0.4% in December.
· The youth unemployment rates on the JSA+UC measure fell in Rushmoor, Test Valley and East Hampshire but the rates edged higher in Basingstoke & Deane, Gosport and Hart. Youth unemployment in the two LEPs in Hampshire, Solent and Enterprise M3, remained unchanged at 1.3% and 0.8% respectively in December.
Note
New Claimant Count Data
As part of the Government’s welfare reforms benefit claimants have been gradually moving over to Universal Credits. On Wednesday 11 November 2015, the ONS published a new dataset measuring the Claimant Count by sex and age that includes out of work Universal Credit claimants, although roll out of Universal Credits across South East is not complete. This new dataset replaces JSA as the headline statistic and will have implications for locally produced unemployment claimant numbers and rates. As shown in the supplementary document (Unemployment Tables) that covers local authority districts, LEPs and Counties, the inclusion of Universal Credits may give a higher unemployment count and rate.
Further Information
What is the New Claimant Count?
The new Claimant Count data is an experimental series that counts the number of people claiming Jobseeker's Allowance plus those who claim Universal Credit who are out of work, and replaces the number of people claiming Jobseeker's Allowance as the headline indicator of the number of people claiming benefits principally for the reason of being unemployed. The Universal Credit estimates are still being developed by the Department for Work and Pensions. The ONS has therefore decided that the Claimant Count estimates including Universal Credit (which have been published as an alternative measure for regions and countries of the UK since July 2014) will continue to be designated as experimental statistics even though they are now the headline measure. The JSA data is still published, but separately.
Local implications
The new Claimant Count data is not as comprehensive as the JSA data. There is currently no breakdown by duration or occupation and no information for when this will be published. Furthermore, the claimant count unemployment rates are available for the 16-64 age group and not other age groups of interest (young people in particular).