United Kingdom: Labor market stays downbeat at the start of Q3 as unemployment edges up
September 15, 2020
According to the ONS, in May–July, the unemployment rate ticked up to 4.1%, while redundancies rose at the sharpest rate since 2009, increasing by 58.000 compared to the same period last year. That said, the number of people temporarily away from work came down to roughly 5.0 million in July—including workers on furlough—although over half reported being away for at least three months. Moreover, the claimant count remained stable at 2.7 million in August, matching the previous month’s reading.
Taken together, this data highlights that the labor market remains weak, as the reopening of the economy has yet to spur job growth. More positively, job vacancies rose approximately 30% in August compared to April, albeit remaining well-below pre-pandemic levels.
While the pickup in economic activity could spur recovery in the labor market the response of employers to the end of the furlough scheme in October will be key to the evolution of the labor market going forward.