Official UK Unemployment and Payroll Job Losses Up

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Official unemployment figures, released today, show a small increase in unemployment.  However, at the same time, payroll figures show some 695,000 job losses amongst employees since March.  How can this apparent contradiction happen?

Official Unemployment

  • The current unemployment rate is 4.1%.
  • Jobless increase of just 0.2% since earlier this year, or 62,000 people.

Payroll job losses

Confusingly, the number of employees recorded on a company payroll has fallen by a lot more over the same time period. Since March;

  • Payroll jobs down by 2.4%
  • 695,000 fewer employees

Payroll data ONS sep

Benefit Count

Another way of trying to work out what is happening is to look at how many people are claiming benefits.  The number of people claiming Universal Credit is;

  • 2.7 million
  • Benefit claims increased by 1.5 million since March

Universal Credit claims ONS

Redundancies also going up

  • There were 156,000 redundancies between May and July.
  • This is an increase of 48,000 on the previous three month period.

ONS redundancy figures sep

So, what is really happening?

According to the ONS, an important part of measuring official unemployment is the requirement to be “actively looking for work”.  The ONS believe that many people are not “actively looking”.  This would explain the apparent difference between the small increase in unemployment and the much larger job losses recorded by Payroll data.

The ONS say the following (our emphasis in bold);

“Unemployment measures people without a job who have been actively seeking work within the last four weeks and are available to start work within the next two weeks. The unemployment rate is not the proportion of the total population who are unemployed. It is the proportion of the economically active population (those in work plus those seeking and available to work) who are unemployed.”

Last month, we reported on a group of employees who, because of the impact of the coronavirus (COVID-19) pandemic, have reported that they are temporarily away from work and not getting paid. Similarly, there is a group of self-employed people who are temporarily away from work… Although these people consider themselves to have a job and therefore are consistent with the ILO definition of employment, their lack of income means that they may soon need to look for work unless they are able to return to their job.

(Also)… certain groups who are economically inactive as they are not currently looking for work but may look for work in the future. These are primarily those who want a job but are not yet looking, but it also includes those who report they do not want a job and either do not believe jobs are available, are not yet looking or are inactive for some other unspecified reason.

Want to learn more?

You can read the full ONS press release 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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