Labour Market Statistics, October 2020
This briefing note sets out analysis of the Labour Market Statistics published this morning (13 October).
Today’s figures show that the official measure of employment has fallen by significantly more than had been previously estimated. Overall, employment is down by nearly half a million since the crisis began. In addition to this, it remains the case that there are likely to be a further half a million people who were still being counted as employed but were away from their jobs and not being paid.
The fall in employment appears to have been driven by a large fall in part-time work, which accounts for nearly 90% of the decline. Part-time employment is now at its lowest since late 2013. It appears that women are particularly affected by this, although it has been offset to some extent by an increase in women’s full-time employment.
So far, lower employment has fed through more into economic inactivity than into unemployment, but in recent months this has started to shift – with unemployment rising to from 4.1% to 4.5% in the last three months alone.
Redundancies have risen sharply again this month, doubling on the previous quarter to 230 thousand. This is the highest level since summer 2009 and the fastest rate of growth on record. We are forecasting that redundancies will continue to rise sharply through the remainder of the year.
The growth in the number of people claiming benefits and treated as unemployed has slowed down, with the published figure for this month actually slightly lower than the published figure last month. However, there is worrying data out today on benefit flows, which suggests that off-flows from benefit are not catching up with the very large on-flows early in the crisis. If off-flow rates do not increase in the next few months then we are likely to see significant rises in long-term unemployment next year.
Finally, there are some slightly more positive signs from the most recent data in today’s figures. The number of payroll employees appears to have stopped falling, and has been broadly flat since June; and vacancies have continued their slow recovery (although they remain low by historic standards). Overall, much of the most negative news today does still appear to be an unwinding of the huge impacts of lockdown, with some signs that the labour market was recovering later in the summer.