Lockdown Britain see record-breaking falls in job vacancies and hours worked

The UK experienced has experienced record falls hours worked and vacancies since the lockdown began, the Resolution Foundation said today (Tuesday) in response to the latest ONS figures.

The latest ONS data shows that while the headline measure of unemployment (covering the period February to April) is yet to capture the effects of the economic crisis, other official data shows record-breaking labour market changes over the course of April and May.

The number of hours worked across the economy fell by a record 94.2 million in April – a drop of almost 9 per cent –surpassing the previous record fall in hours worked (3.9 per cent in June-August 2009). The number of vacancies also fell by a record 436,00 (60 per cent) between March and May to reach 318,000.

Real average pay fell by 0.8 per cent between April and May, following a fall of 2.8 per cent between March and April.

The number of people in employment fell by 430,000 between March and April, and more timely HMRC data suggest that the number of employees continued to fall by 160,000 in May. This has so far showed up in a rise in economic inactivity (up 425,000 in April) rather than unemployment, with the lockdown limiting the numbers actively searching for work, says the Foundation.

The claimant count – a measure which includes those claiming unemployment benefits and some low-income workers – reached 2.8 million in April, an increase of 530,000 on the month, far surpassing the peak of the last crisis (1.6 million).

Changes to benefit generosity and processes during the pandemic mean that this measure should be treated with caution and not as a measure of unemployment. However, but it reinforces the likelihood that Britain is on course for the biggest jobs crisis for at least a quarter of the century.

The Foundation says that, while the more up-to-data suggests that the rapidity of Britain’s job crisis may have eased in May, its depth has certainly not – with unemployment set to get far worse before it gets better. It notes that a second wave of unemployment is expected later in the year as the Job Retention Scheme, which supports around nine million workers, is phased out between August and October.

The Foundation says radical steps are needed to reduce the depths of this labour market crisis before the next surge in joblessness arrives. These should combine broad-based fiscal stimulus measures, job guarantees for the young, and back-to-work support for the unemployed.

Nye Cominetti, Senior Economist at the Resolution Foundation, said:

“Britain’s economic crisis has hit the labour market hard, with a record fall in the number of hours worked across the economy and in vacancies.

“While the pace of the labour market decline eased in May, the depth of the crisis is still deteriorating hugely. Unemployment will get worse before it gets better, particularly once furloughing is ended for nine million employees by the end of October.

“The Government will need a bold package of support measures in place to help them before this second wave of unemployment arrives.”