Our Senior Analysis Manager, Zach Wilson, reflects on July’s labour market stats.
As the Conservatives choose a new leader, and Prime Minister, ONS labour market statistics show the polarising labour market for young people, as well as the continued effects of rising prices. Since March, economic inactivity for young women aged 16-24 who are not in full time education has decreased from 18.4% to 18.1%, while the unemployment rate has increased from 6.6% to 6.8% and employment slightly increasing to 76.3% from 76.2%. As well, since March, for young men aged 16-24 not in full time education, there has been an increase in economic inactivity from 14.9% to 15.5% and a decrease in employment from 75.4% to 75.1%.
This is quite positive for young women who are not in full time education and have left the labour market, as it shows more are seeking work – but not quite the same picture for men.
In those months, economic inactivity for women in full time education increased from 61.3% to 62.2% and unemployment declined from 12.9% to 13.3%. For men, economic inactivity declined from 68.8% to 68.2% and unemployment declined from 16% to 15.5%. Again, a slightly different picture than young men and women who are not in full time education. It is essential to dig a bit further and understand why there are these changes in the labour market for young people in and out of full time education.
Long-term unemployment has declined for 18-24 year olds, as has total unemployment, which is positive news. However, long term unemployment stays stubbornly high post pandemic.
With sustained inflation, following the record high of 9% in April, we see further increases in cost of living across many categories. The largest increases are still in housing, water, electricity, gas and other fuels over the past quarter. The impact on young people is mixed due to differing individual circumstances. However, the new Prime Minister will have to address challenges in the labour market and the increasing cost of living for young people. It is essential that young people who want to find a job can find the jobs they want, and they are paid good wages that keep up with the rising cost of living. It is imperative that we address this polarisation in the labour market as well as the continued effects of the increasing cost-of-living.