Labour Market Statistics, August 2020

This briefing note sets out analysis of the Labour Market Statistics published this morning (11 August).  Today’s figures largely cover the period of full lockdown (from March to June), alongside July data from employee payrolls and the vacancy survey.  They show that the jobs market continued to weaken as the lockdown progressed, with further large falls in paid employment and self-employment and the number of people claiming unemployment-related benefits continuing to rise.

All told, there are likely to be around one million fewer people were in paid work by July than in March, with the number of paid employees down by three quarters of a million and the number of people with self-employed earnings down by around a quarter of a million.  This is a virtually unprecedented reversal, but would have been far worse without the government’s Job Retention Scheme and self-employment income support.

There are worrying signs that younger people are being particularly hard hit, with the number of young people not in full-time education or employment rising to its highest since 2015, and nearly one in seven now claiming unemployment-related benefits – up from fewer than one in fifteen before the crisis began.  People aged over 65 also appear to be facing significantly greater impacts than other age groups.

In twenty local areas, more than one in eleven residents are on the claimant count – with this dominated by inner cities (particularly in London), ex-industrial areas and coastal towns.  Many of these areas also had the highest levels of worklessness and faced the most significant disadvantages before the crisis began.

The one bright spot in today’s figures is that the fall in vacancies appears to have bottomed out, with a significant bounce-back in notified vacancies in the single-month estimate for July. At 470 thousand this remains well below pre-crisis levels, and may reflect short-term recruitment into covid-related roles.  However if it is sustained, then it would see vacancies return to broadly the levels that they were at during the recovery from the last recession.