Sky News’s economics editor Ed Conway has written a good thread about this morning’s labour market report:
There is a continued air of unreality over the official UK jobs figures. The unemployment rate has now started to rise, but at 4.1% it’s still v low and you can barely make out the increase when you look in historical context. pic.twitter.com/6rv40Uu2bI
Better to look at a range of other measures, inc this: payroll jobs. It’s down by around 700k since the beginning of #COVID19. That’s actually slightly less of a fall than the @ONS originally calculated. But we’re in such uncharted territory that I wouldn’t read too much into it pic.twitter.com/bB4sD34kaz
Redundancies are now rising at the fastest rate since the financial crisis. But this is only the start. As the furlough scheme comes to an end there are likely to be many more. Sadly, this line is almost certainly heading a lot higher… pic.twitter.com/lR0udagfAf
There is some good news buried in the data though. Hours worked have stopped falling (after an unprecedented collapse) and are rising slightly. Though as with GDP the rebound still leaves us way down on the pre-crisis level. Not surprising since many are still furloughed pic.twitter.com/nyUBY746kN
The number of redundancies in Britain has accelerated at the fastest pace since the financial crisis as the hit to the economy during the coronavirus pandemic triggers rising levels of unemployment.
Against a backdrop of growing concern over a jobs crisis this autumn as the government’s furlough scheme comes to an end, the Office for National Statistics (ONS) said 156,000 people were made redundant in the three months to July.
This is a jump of 48,000 from the three months to the end of May and the sharpest quarterly increase since 2009.
In an sign of the damage as Britain’s economy plunged into the deepest recession since modern records began during the coronavirus lockdown, the ONS said early indicators from HMRC showed almost 700,000 workers had dropped from company payrolls since the onset of the pandemic in March, with the brunt of the jobs crisis being borne by younger workers….
Although the jump in redundancies in the last quarter is very sharp, it only captures a portion of all the jobs lost.
The ONS estimates that the number of payrolled employees fell by 2.2% compared with August 2019.
That includes a tumble of 36,000 people in August along, taking the total fall in payrolled employment to 695,000 since March (as flagged earlier).
Younger workers, and older women, both suffered a record drop in employment in the last quarter.
Those aged 16 to 24 years decreased by 156,000 to 3.63 million (with a record decrease of 146,000 for those aged 18 to 24 years), while those aged 65 years and over decreased by 92,000 to 1.28 million (with a record decrease of 79,000 for women in that age group).
Tale of two crises in today’s jobs stats. Ongoing easing of lockdown means big fall in numbers away from work, increase in hours and pay, vacancies rising.But recession, uncertainty and restructuring sees huge fall in youth employment and 45% increase in redundancies. Graphs: 1/
Starting on age. Employment falling for youngest and oldest, i.e. those in less secure work/ often in sectors most affected. Falls for young people are huge – back to 2015 levels, largest fall since March 2009. 2/ pic.twitter.com/8jtflr6Oz9
On redundancies, these are up 46% on the quarter, to 156k. Highest since the public sector losses in 2011-12. Bear in mind only one third of LFS respondents will have been in July, when we think they started to rise strongly. So this will get higher still (see our note yday). 3/ pic.twitter.com/MaQngANO51
With millions of people still furloughed, the number of hours worked across the UK economy is still dramatically low, as this chart shows:
Between February to April 2020 and May to July 2020, total actual weekly hours worked in the UK decreased by 93.9 million to 866.0 million hours. Average actual weekly hours fell by 2.8 hours on the quarter to 26.3 hours.
Over the year, total actual weekly hours worked in the UK decreased by 183.8 million to 866.0 million hours in the three months to July 2020. Over the same period, average actual weekly hours fell by 5.8 hours to 26.3 hours. The accommodation and food service activities sector saw the biggest annual fall in average actual weekly hours, down by 15.4 hours to 13.5 hours per week.
The number of vacancies at UK companies has risen since the lockdown eased, but remains extremely low.
In the June-August quarter, there were 434,000 vacancies in the UK, which is almost 30% higher than the record low in April to June 2020, the ONS reports.
But as you can see, it’s still just half as many as a year ago — and as bad as during the depths of the financial crisis.
The ONS says that the recent increase was driven by small businesses (those with 49 or fewer employees), adding:
With some firms struggling badly, the total jobs lost since March has now risen to almost 700,000 (measured by the number of people on company payrolls).
Britain’s labor market took a turn for the worse in July even as the economy gradually reopened, taking total job losses under the pandemic to almost 700,000 and raising pressure on the government to extend support programs.
Employment fell by 102,000, the first decline since April, the Office for National Statistics said Tuesday. The single-month unemployment figure reached 4.4%, the highest since 2018.
While restaurants and pubs started to reopen after coronavirus lockdowns, the figures are a reminder that the upturn in spending masks deeper fragilities.
The number of employees on payrolls in August is down 695,000 from March, compared with 659,000 in July. The number of people claiming for jobless benefits has risen to 2.7 million, an increase of 121% since March.
We’re still just at the start of what looks set to be a brutal period of redundancies: pic.twitter.com/Q1IsIFQFJK
Stuart McIntyre of the Fraser of Allander Institute is also worried, and points out that the furlough scheme has protected many jobs:
A harbinger of what lies ahead, 156,000 redundancies in the UK in the three months to the end of July – the largest annual and quarterly increases seen since 2009. But, as always, remember how many jobs were still furloughed at the time of these statistics… pic.twitter.com/Ym3Ca6qPTy
The Office for National Statistics also reports that over five million people were on the Covid-19 Job Retention Scheme in July 2019.
That means the government was covering a portion of their wages because their employer doesn’t have enough work to need them to do all their hours.
More than 2.5m of those people have been temporarily away from work for three months or more.
The unemployment rate edged up to 4.1% (May-July) well below even the most hopeful forecasts. But in July more than 5 million people reported themselves “temporarily away from paid work”. The furlough scheme has helped avoid mass redundancies during lockdown, it ends next month. pic.twitter.com/raBoFUA834
There were also around 250,000 people away from work because of the pandemic and receiving no pay in July 2020, the ONS adds.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
We start with grim news from the UK jobs market. The number of people being laid off has jumped at the fastest pace since the financial crisis, as Covid-19 continues to hurt the UK economy badly.
Figures just released show that 156,000 people were made redundant in the May-July quarter – an increase of 58,000 compared with the same period in 2019.
These are the largest annual and quarterly increases seen since 2009. While redundancies are at their highest level since September to November 2012, the level remains well below that seen during the 2008 downturn.
Many of those jobs will have been lost in the retail, hospitality, accommodation and leisure sectors, where companies were forced to shut down this spring, and have suffered weak sales since.
Worryingly, it comes before the government wraps up its jobs retention scheme, forcing employers to decide whether to keep furloughed workers on their books or not.
Today’s jobs report also shows that the number of employees in the UK on payrolls was down around 695,000 in August, compared with March 2020. That’s another good indicator of the damage caused by the coronavirus crisis.
This has pushed the UK unemployment rate up, to 4.1%, another concerning sign. That’s still pretty low by historic standards, and shows that the furlough scheme did help prevent an immediate spike in unemployment.
The employment rate has also gone up slightly, to 76.5%, as more people returned to work as lockdowns eased.
But today’s jobs report also shows that younger workers are suffering particularly badly from the recession.
Over the quarter, there has been a large decrease in the number of young people in employment, while unemployment for young people has increased.
We get a new healthcheck on the oil market, where demand had been hammered by the pandemic, plus the latest survey of economic confidence in Germany. Industrial output figures from the US will show if its factories are still recovering.
Overnight, China has reported a pick-up in industrial output and retail sales (more on that later).
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Unemployment, Coronavirus, Unemployment in the United Kingdom
Actu monde – GB – Biggest jump in UK redundancies since 2009 as Covid-19 hits jobs market – business live