Saturday, October 31, 2020

Largest rise in unemployment in over a decade

The UK experienced the largest rise in unemployment in over a decade – rising by 138,000 in the three months to August – as self-employed men lost their jobs and women working part-time fell out of the jobs market altogether, the Resolution Foundation said today (Tuesday)

Headline unemployment increased from 4.1 per cent to 4.5 per cent in the three months to August, including a rise from 4.2 per cent to 4.9 per cent among men and from 3.9 per cent to 4.0 per cent among women.

The male unemployment rise has been driven by falling self-employment – down by 366,000 since the start of 2020 (from the three months to February 2020 to the three months to August 2020).

Rising inactivity among women has been driven by part-time employees stopping work – down by 308,000 since the start of 2020.

Overall employment is down 480,000 on the start of the year, with 16-24-year-olds accounting for 60 per cent of this fall.

There was further evidence of this labour market deterioration in redundancies, which increased by a record 114,000 in August.

More positively, the number of job vacancies has started to recover – up to 488,000 in the three months to September from 343,000 in April-June (though still 41 per cent down on pre-crisis levels).

The Foundation also notes that September did not see a further fall in employment in the more timely HMRC PAYE data.

But with almost three million employees still furloughed at the end of August, social distancing restrictions now ramping back up, and government support being reduced significantly, further jobs losses are now inevitable over the course of the Autumn, says the Foundation.

Nye Cominetti, Senior Economist at the Resolution Foundation, said: “The jobs market deteriorated significantly over the summer, with the biggest rise in unemployment in over a decade taking place even while the economy continued to open up.

“Thousands of self-employed men lost their jobs, while women working part-time left the jobs market altogether.

“With economic support falling just as lockdown restrictions increase across the country, we should prepare for a major increase in unemployment over the coming months.

“The Government should do more to limit this unemployment rise, including reducing employer contributions in the Job Support Scheme so that it supports firms to cut hours rather than jobs.”

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