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Employment rate continues to rise, reaching 76.3%

The ONS has released its latest employment figures for the period between September and November 2019.

The latest UK labour market statistics show that the level of employment increased by 208,000 (an increase of 0.6%) on the quarter to a record high of 32.90m in the three months to November 2019. In the year to November 2019, employment increased by 359,000 (1.1%). The employment rate increased by 0.6 percentage points on the year to reach a record high of 76.3%.

The increase in total employment was largely driven by women, whose employment increased by 148,000 to a record high of 15.58 million in the latest quarter. For women, this was the largest quarterly increase since February to April 2014. The number of men in employment increased by 60,000 to a joint record high (with November 2018 to January 2019) of 17.32 million. The employment rate for men was 80.4% and that for women reached a record high of 72.3%.

In recent periods, UK unemployment showed signs of stabilising, with limited changes occurring in the short term. In the three months to November 2019, the level of unemployment reduced marginally by 7,000 on the quarter to 1.31 million. The unemployment rate remained unchanged at 3.8%.

The fall in unemployment was caused by the number of unemployed women reducing by 9,000, while that of men increased by 2,000.

In the period September to November 2019, the level of economic inactivity fell by 171,000 to 8.51 million. This was the largest quarterly decrease since the three months to July 2012. 

The latest UK labour productivity estimates for the period July to September 2019 show that growth in labour productivity in the whole economy was weak, with output per hour growing by 0.4% on the quarter to September 2019. Since productivity is one of the main determinants of wage growth, weak productivity growth potentially limits wage growth. 

Neil Carberry, CEO at the Recruitment & Employment Confederation, said, “There are two sides to today’s labour market statistics. On one hand it’s great news that the UK labour market has remained so steady in the face of uncertainty, and the economy continues to keep record numbers of people in work. On the other however, businesses want to grow but are struggling to find the right people in such tight conditions. Employers in construction, education and social care – three sectors that are at the core of our prosperity – need workers at all skill levels.

“We need an immigration system that is controlled and works for the whole economy. The government must to be careful not to cut businesses off from the essential skills they need. It would be a big win for the government to introduce a temporary immigration route to meet the needs of the economy for some workers at lower pay and skill levels. This will help businesses succeed post-Brexit and support the jobs and growth here in the UK.”

Pawel Adrjan, UK economist at Indeed, commented, “Economic growth is currently as glacial as the winter weather, but the UK’s job creation engines are still running hot. 208,000 more people joined the workforce in the three months to November and the employment rate has risen again - to a new all-time record - while the unemployment rate continues to bump along at rock bottom levels.

“But for all its resilience in the face of the economic slowdown, Britain’s jobs creation miracle is running out of road. While the total number of vacancies rebounded slightly in the final quarter of 2019, it’s down nearly 50,000 on the same time in 2018 as employer demand stays fragile.

“There are still over 800,000 vacancies, which is good news for jobseekers. But as competition between employers for recruits softens, so too does the pressure on them to pay more to attract candidates.

“As a result, average annual pay growth has slowed slightly to 3.4%. It is comfortably outpacing the rate of inflation - boosting people’s spending power - but average pay in real terms is still £1 per week below the pre-crisis peak.

“The labour market’s stoicism in the face of wider economic weakness is impressive. We will wait to see if the first months of 2020 enable this trend continue, with the Government’s pledge to increase spending on infrastructure, NHS and police recruitment fire more job creation.”

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