This months’ labour market statistics show that unemployment rose to 4.6% in February-April 2025, which is the highest it has been for nearly four years. This increase is partly driven by those who were economically inactive, meaning those who are out of work and not looking for work, joining the labour market and starting to look for a job, with the inactivity rate falling to 21.3% (0.2 percentage points on the quarter).

The data suggests that some jobseekers may be struggling to obtain work. Vacancies have continued to decline and have now fallen below pre-pandemic levels, which reduces job opportunities and increases competition for jobseekers. This is highlighted by the increase in short-term (<6 months) unemployment by 34,000 jobseekers aged 16 and over.

Signs of an uptick in long-term unemployment

More concerningly, we are also seeing an uptick in people being unemployed (meaning they are actively job seeking) for over a year, of 68,000 on the quarter, which indicates that some who are looking for work are unable to find it for extended periods of time. This can have negative consequences for jobseekers’ physical and mental wellbeing, and their chances of finding work at all.

Older jobseekers appear to be struggling to get back into work

The landscape appears to be particularly challenging for older workers aged 50-64. Among this group, an additional 88,000 people joined the labour market, but of these, within 3 months, 61% became jobseekers (unemployed) and only 39% moved into work. Over a longer timeframe, the success rate for obtaining work increases, with 81% of this age group who joined the labour market finding work over the past year (145,000 out of 180,000). However, this also means that 19%, or nearly one in five new jobseekers in this age group did not manage to find work within 12 months.

People who were caring for the home/family are also re-entering the labour market

This quarter has seen a particularly strong decrease in those who were inactive for reasons of caring for the home/family, short-term sickness and early retirement. This hints at economic need driving people to look for work, to face the continued pressure on the cost of living.

There are other indications that people are looking to maximise their income, for instance by the strong increase in people taking up second jobs, which rose by 121,000 (9.9%) on the year to a new record high of 1.35 million workers. We know from our previous research that the majority of these workers struggle to make enough money in their main roles to get by, prompting them to look for additional work and hours elsewhere.

Quality of available jobs

Another area of concern is the increase in the number of workers who are in temporary jobs while they would prefer to be in permanent jobs. The number of temporary jobs went up by 143,000 on the year, to 1.6m, the first time in a year and a half it has reached such heights (since Aug-October 2023). The proportion of workers who do this involuntarily increased from 19.8% last year to 24.9% in Feb-April 2025, meaning that there one in four temporary workers are doing this involuntarily.

Figure 1: Number of temporary jobs highest in 18 months

Source: Work Foundation analysis using Office for National Statistics (10 June 2025). Dataset: A01, Table 3: Full-time, part-time and temporary workers: People (seasonally adjusted).

Under the bonnet: regional labour markets

The national picture hides much variation. The wider shift out of inactivity and into job seeking plays out to varying degrees across regional labour markets.

In Wales, inactivity reduced by 77,000 on the year, with the majority of people who joined the labour market finding work. In contrast, in London, inactivity reduced on the year, but added 79,000 additional unemployed people and a smaller group (55,000) finding employment. In the East Midlands, there was a fall in unemployment, but a rise in inactivity, which might mean that some who were looking for jobs have stopped looking and have become inactive.

These shifts in the figures are structured to an important degree by the number, and the quality of job opportunities in the areas where people live. The figure below uses live vacancies data to show the differing levels in job opportunities across the country.

Figure 2: Job vacancies by NUTSII

Source: Work Foundation analysis of Adzuna Intelligence.

Chancellor should seek to soften impact of reforms on most vulnerable workers

Earlier this year, the Chancellor announced cuts to health-related benefits, and promised enhanced employment support, arguing that this would prompt more people to take up work. However, the sequencing of these reforms mean that the cuts will start to bite well before the new employment support pilots are fully rolled out, and before the job quality improvements promised in the Employment Rights Bill take hold. Furthermore, by government’s own assessment, only a small proportion of people will be supported into work, whereas hundreds of thousands more will be plunged into poverty.

Notably, despite PIP not being a work-related benefit, we know that many workers use that benefit to support their ability to stay in work (our recent survey found that 4 in 10 workers with MS use it) , and cutting this is likely to have an adverse impact on government’s aims to increase labour market participation.

In the context of a weakening labour market, the Chancellor should reverse or postpone the benefit reforms, until the job market is ready to provide suitable work to those who want it.

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