UK unemployment below 2m

UK Labour Market, October 2014

Key Points for June to August 2014

  • There were 1.97 million unemployed people, 154,000 fewer than for March to May 2014 and 538,000 fewer than a year earlier. This is the largest annual fall in unemployment on record. Records for annual changes in unemployment begin in 1972.
  • The unemployment rate continued to fall, reaching 6.0% for June to August 2014, the lowest since late 2008. The unemployment rate is the proportion of the economically active population (those in work plus those seeking and available to work) who were unemployed.
  • There were 9.03 million people aged from 16 to 64 who were out of work and not seeking or available to work (known as economically inactive). This was 113,000 more than for March to May 2014 but 46,000 fewer than for a year earlier.
  • The economic inactivity rate was 22.2%, higher than for March to May 2014 (22.0%) but lower than for a year earlier (22.4%).
  • There were 30.76 million people in work. This was 46,000 more than for March to May 2014, the smallest quarterly increase since March to May 2013. Comparing June to August 2014 with a year earlier, there were 736,000 more people in work.
  • The proportion of people aged from 16 to 64 in work (the employment rate), was 73.0%, slightly higher than for March to May 2014 (72.9%) and higher than for a year earlier (71.5%).

Unemployment continues to fall

Labour Market Statistics, September 2014

  • Comparing the estimates for May to July 2014 with those for February to April 2014, employment continued to rise and unemployment continued to fall. These changes continue the general direction of movement since late 2011/early 2012.
  • There were 30.61 million people in work. This was 74,000 more than for February to April 2014, the smallest quarterly increase since April to June 2013. Comparing May to July 2014 with a year earlier, there were 774,000 more people in work.
  • The proportion of people aged from 16 to 64 in work (the employment rate), was 73.0%, slightly higher than for February to April 2014 (72.9%) and higher than for a year earlier (71.6%).
  • There were 2.02 million unemployed people, 146,000 fewer than for February to April 2014 and 468,000 fewer than a year earlier. This is the largest annual fall in unemployment since 1988.
  • The unemployment rate continued to fall, reaching 6.2% for May to July 2014, the lowest since late 2008.
  • There were 8.93 million people aged from 16 to 64 who were out of work and not seeking or available to work (known as economically inactive). This was 114,000 more than for February to April 2014 but 31,000 fewer than for a year earlier.
  • The economic inactivity rate was 22.1%, higher than for February to April 2014 (21.8%) but lower than for a year earlier (22.3%)

Household spending

Consumer Trends, Q2 2014

  • In Q2 2014, household spending (adjusted for inflation) grew by 0.6% (£1.5 billion).
  • The main contribution to growth can be seen in ‘Miscellaneous goods and services’ which has increased by 2.8% compared with Q1 2014. The largest negative contribution to growth can be seen in ‘Food and drink’ which has fallen by 0.9% compared with Q1 2014.
  • Household spending when compared with the same quarter a year ago has been rising each quarter since Q3 2011, it was 2.1% higher in Q2 2014, when compared with Q2 2013.
  • The current price value of household spending, which includes inflation, shows how much UK households spent. In Q2 2014 current price spending increased by 1.2% compared with Q1 2014, continuing the trend of positive quarterly growth since Q3 2009.
  • The household expenditure implied deflator grew by 0.6% in Q2 2014. Within household spending categories the ‘Miscellaneous goods and services’ implied deflator showed the largest increase in percentage terms, growing by 2.5% in Q2 2014.

UK economic growth revised upwards

Quarterly National Accounts, Q2 2014

  • UK gross domestic product (GDP) in volume terms was estimated to have increased by 0.9% between Q1 2014 and Q2 2014, revised up 0.1 percentage points from the second estimate of GDP published on 15 August 2014.
  • Annual GDP in volume terms was estimated to have increased by 1.7% in 2013, compared with 2012, unrevised from the estimate published on 15 August 2014.
  • Between Q2 2013 and Q2 2014, GDP in volume terms increased by 3.2%, unrevised from the previously published estimate.
  • GDP in current prices was estimated to have increased by 1.9% between Q1 2014 and Q2 2014.
  • The peak to trough fall of the economic downturn in 2008/2009 is now estimated to be 6.0%. Previously this was estimated to be 7.2%.
  • In Q2 2014, GDP was estimated to have been 2.7% higher than the pre-economic downturn peak of Q1 2008, having first exceeded this peak in Q3 2013.
  • The household saving ratio was estimated to be 6.7% in Q2 2014
  • Real household disposable income increased by 2.2% between Q1 2014 and Q2 2014

First decline in spending in food stores in 25 years

Retail Sales, July 2014: ONS

  • In July 2014, the quantity bought in the retail industry increased by 2.6% compared with July 2013 and by 0.1% compared with June 2014.
  • The three-month on previous three-month movement in the quantity bought showed continued growth for the seventeenth consecutive month increasing by 0.3%.  This was the longest period of sustained growth since November 2007.
  • Average prices of goods sold in July 2014 compared with July 2013 showed deflation of 0.9%. Food stores were the only sector to show an increase in prices (0.2%).  There has been declining growth in this series with July 2014 showing the lowest growth since December 2004, when it fell by 0.1%.  These data are consistent with the Consumer Prices Index (CPI) which was published on 19 August 2014.
  • Since the food stores series began in January 1989, July 2014 was the first time we have seen a fall in the amount spent in food stores year-on-year (1.3%).
  • In July 2014, the amount spent in the retail industry increased by 1.7% compared with July 2013 and fell by 0.1% compared with June 2014.  Non-seasonally adjusted data show that the average weekly spend in the retail industry in July 2014 was £7.0 billion compared with £6.9 billion in July 2013 and £7.0 billion in June 2014.
  • The amount spent online increased by 11.2% in July 2014 compared with July 2013 but decreased by 1.9% compared with June 2014.

Self-employment higher than at any point over past 40 years

Self-employed workers in the UK – 2014: ONS

  • Self-employment higher than at any point over past 40 years
  • Rise in total employment since 2008 predominantly among the self-employed
  • Rise predominately down to fewer people leaving self-employment than in the past
  • The number of over 65s who are self-employed has more than doubled in the past 5 years to reach nearly half a million
  • Self-employed workers tend to be older than employees and are more likely to work higher (over 45) or lower (8 or less) hours
  • The number of women in self-employment is increasing at a faster rate than the number of men (although men still dominate self employment)
  • The most common roles are working in construction and taxi driving and in recent years there have been increases in management consultants
  • Average income from self-employment fallen by 22% since 2008/09
  • Across the European Union the UK has had the third largest percentage rise in self-employment since 2009