Youth labour market statistics are complicated by the relatively recent rapid growth in the numbers of young people still in education, (since levelled off). The unemployment rate is a measure of the unemployed in the labour force = unemployed/(unemployed+employed). Rising staying on rates will tend to reduce numbers in the labour force and so inflate the unemployment rate for a given number of unemployed.1 This makes measuring youth unemployment relative to something that will vary less with policy or labour force participation trends a better metric for comparing performance over time. If instead we measure unemployment relative to the entire youth population, we get the u-pop rate. This should be much less susceptible to changes in labour force participation,2 and is another useful indicator of youth labour market performance.
In short, it is probably best to look at a range of youth labour market indicators rather than focus on one.
Figure 1 plots both the youth unemployment (left panel) and NEET rates (right panel) in each week throughout 2020 relative to the average of the last 5 years. Anything outside the light grey is a significant departure from recent norms.3 The unemployment and NEET rates are, coincidentally, very similar at around 15% right now. However, even with the latest rise in redundancies, there is not much in either the unemployment or the NEET rate for weeks during October and November and early December (weeks 40 to 49 on the graphs) that we haven't seen in the last 5 years before the COVID downturn.
Figure 1. Youth Unemployment and NEET Rates 2020 relative to 2015-2019 average
|Unemployment Rate||NEET Rate|
Figure 2. The UK Youth Labour Market Through the Ages
1 ↩ 10 unemployed, 90 employed 50 inactive (education) = unemployment rate =10/(10+90)= 10%, but 10 unemployed, 50 employed 90 inactive = unemployment rate =10/(10+50) = 16.6% .
2 ↩ Not in EmploymEnt or Training measured as a percentage of the 16-24 year old population.
3 ↩ More details on how these graphs are worked out can be found here