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Financial News: UK Loses 650K Jobs Due To Pandemic

UK Loses 650K Jobs Due To Pandemic

07/16/2020 - 07:43:00 (RTTNews)

(RTTNews) - Since March, the UK lost about 650,000 jobs due to the coronavirus pandemic, despite the government's furlough scheme, official data showed Thursday.

The Office for National Statistics said early indicators for June suggested that the number of employees on payrolls fell around 650,000 compared to March. Although the number of payroll employees is still falling, the decline is slowing.

The statistical office said there were around half a million people temporarily away from work because of the pandemic and receiving no pay while their job was on hold.

In the three months to May, the jobless rate remained largely unchanged at 3.9 percent and well below economists' forecast of 4.2 percent.

At the same time, the employment rate rose 0.3 percentage points to 76.4 percent in the three months to May.

The number of unemployed increased by 55,000 from last year to 1.35 million in the March to May period.

Further, data showed that actual weekly hours worked decreased 16.7 percent annually between March and May, the largest fall since estimates began in 1971.

Average earnings, including bonuses, slid 0.3 percent annually, which was the first fall since mid-2014. Economists had forecast an annual decrease of 0.4 percent.

At the same time, annual growth in earnings, excluding bonuses, grew at a slower pace of 0.7 percent versus the expected growth of 0.5 percent.

Data showed that job vacancies during April to June were at the lowest level since the Vacancy Survey began in April to June 2001, at an estimated 333,000.

In June, the jobless claims decreased by 28,100 from the previous month, in contrast to an expected increase of 250,000.

The smaller-than-expected fall in employment in May and evidence that the first wave of joblessness in the coronavirus crisis ended in June shows that the furlough scheme has been effective in preventing a big rise in unemployment, Andrew Wishart, an economist at Capital Economics, said.

The big question is how large the second wave of unemployment will be when the furlough scheme is wound down, the economist added.

Low UK unemployment masks mounting job losses, James Smith, an ING economist said.

Job losses, unfortunately, appear to be rising, and recent data on the government's furlough scheme suggests that these redundancies are likely to be heavily concentrated among lower-paid workers, he noted.

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