The good news from the ONS last week is that the unemployment rate is down and the employment rate is up.
But, while the trends are encouraging, the statistics are a little confusing. After all, why does unemployment of 4.0% plus employment of 75.8% not add up to 100%?
We delve into the mysterious world of UK workforce statistics for the ICAEW #chartoftheweek.
Let’s start with the unemployment rate, which excludes 19.26m ‘economically inactive’ individuals from the calculation. These comprise 11.73m in retirement, 2.27m students, 2.05m homemakers, 1.98m long-term ill and 1.23m not working for other reasons.
The employment rate calculation includes most of these, but not 11.90m people aged 65 or more (1.28m of whom are in work). On this basis the rates do add up to 100%, with employment of 75.8%, unemployment of 4.2% and economically inactive of 21.0%.
One mystery solved, but another is why the ONS don’t publish the share of those in work out of the total population? We estimate this to be 48.9%, meaning that less than half of all people living in the UK are actually in employment.
This seems to us to be extremely important to know given the increasing pressures being placed on the public finances as more people live longer.