UK Employment Figures, May 2020: Unemployment Benefit Claims Jump in Covid-19 Hit
Today’s ONS labour market update offered the first official glimpse at the damage caused to the UK labour market by Covid-19. While ONS data on employment and unemployment still only covers the period to March and thus tells us little about the current situation, the more timely claimant count and job vacancies figures cover the period to early April and show some big changes.
The number of people claiming unemployment benefits increased by 857,000 to 2.1 million, with the claimant count rate jumping from 3.5% to 5.8%. That was the largest monthly increase since comparable records began in 1971. Given that the reference date for the claimant count is 9 April, we can expect this measure to have worsened considerably in next month’s update.
Vacancies meanwhile dropped by more than half in the latest period (to 3 April), from 750,000 to 351,000 on the single-month measure, exceeding falls seen in the financial crisis of 2008/9. The data show a similar trend to what we’ve been seeing for online job postings on Indeed. Reassuringly though, the latest weekly Indeed data from May suggest that vacancies are finally stabilising.
This was also manifested in a sharp drop in hours worked, which showed the largest annual decrease in ten years in the last week of March (down around 25% compared with other weeks in the quarter). Preliminary HMRC payrolls data also indicated that the number of paid employees fell by 1.6% from March to April, and was down 1.2% compared with April 2019 — the biggest drop since comparable data were first available in 2014.
Jack is an Economist on the Indeed Hiring Lab who focuses on the UK/Ireland labour market. Before joining Indeed, Jack was a senior economist at Nationwide Building Society and prior to that at global information provider IHS Markit. He holds an MSc in finance and economic policy from SOAS, University of London and a BSc in economics and finance from the University of York.