UK Unemployment edges up to 4.5%
Official unemployment figures, released today, show a small increase in unemployment. Redundancies and the Claimant Count are also up. However, at the same time, payroll figures show jobs increasing slightly.
- The current unemployment rate is 4.5%.
- Increase of 0.4% from last month
- Jobless increase of 153,000 people in the last 3 months.
Payroll job losses
Confusingly, the number of employees recorded on company payrolls has gone in the opposite direction and increased slightly from last month.
- Payroll jobs up by 0.1%
- 20,000 more employees
Another way of trying to work out what is happening is to look at how many people are claiming benefits. Universal Credit can be claimed for both low pay and unemployment. The number of people claiming Universal Credit is;
- 2.7 million
- Benefit claims increased by 1% from last month
Redundancies also going up
- There were 227,000 redundancies between June and August
- This is an increase of 114,000 on the previous three month period.
The increase of 114,000 redundancies is a record increase over three months.
So, what is really happening?
The ONS say the following (our emphasis in bold);
Since the beginning of the pandemic, we see fewer people in work (down 500k since early 2020), and more people (150k) who are unemployed. But there are also more people who are not working and who are currently not looking for work (250k ‘economically inactive’).
The fall in employment is particularly marked for younger people. 16-24 yr old employment is down 300k, so 60% of the fall in employment has been younger people. Being out of work early in life can affect your employment prospects later, so this is a concern.
But the effect on jobs has been more muted than the effect on GDP, in part due to furloughing. The latest data from businesses suggests 9 per cent of workers are furloughed (full or partially), which equates to around 3 million people.
Overall the effect on the labour market has been much more muted than the significant downturn in GDP/economic output. The aggregate picture also masks a lot of variation, with younger people and those in some specific sectors most affected
There also remain lots of uncertainties such as what will happen to the people who remain on furlough, how the labour market will respond to new restrictions and how the wider economic outlook will develop.
Want to learn more?
You can read the full ONS press release here
You can learn more from Jonathan Athow of the ONS here
The ONS are the Office for National Statistics and are the official UK stats agency. All graphs above from the ONS press release.
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