Unemployment claims soar by 1.6 million since March

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The number of people on company payrolls fell sharply by 612,000 between March and May in the latest sign of the deepening impact of the Covid-19 pandemic on the UK economy.

Early estimates from the ONS show that the number of paid employees dropped 2.1% in May compared to March, while over the three month period unemployment claims soared by 1.6 million.

The number of people temporarily away from work, including furloughed workers, rose by six million at the end of March into April.

Jobless claims under universal credit jumped 23.3% month-on-month in May to 2.8 million, having rocketed 125.9% or 1.6 million since March, when the UK was placed in lockdown.

The grim ONS data also showed the number of people temporarily away from work, including furloughed workers, rose by six million at the end of March into April.

This saw hours worked each week tumbled by a record 94.2 million, or 8.9% year-on-year, in the three months to April, the ONS said.

Data from the ONS from February to April also showed a record quarterly fall in the number of self-employed, down 131,000.

Unemployed is set to accelerate further as companies are weened of the UK Government’s Job Retention Scheme, which firms having to make contributions to the cost of furloughed staff from August. The scheme, that have been paying 80% of wages of furloughed staff along with employer NI and pension contributions, is set to end at the end of Octobet.

The number of people temporarily away from work, including furloughed workers, rose by six million at the end of March into April.

Jonathan Athow, deputy national statistician for economic statistics at the ONS, said: “The slowdown in the economy is now visibly hitting the labour market, especially in terms of hours worked.

“Early indicators for May show that the number of employees on payrolls were down over 600,000 compared with March.

“The Claimant Count was up again, though not all of these people are necessarily unemployed.”

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He added: “More detailed employment data up to April show a dramatic drop in the number of hours worked, which were down almost 9% in the latest period, partly due to a six million rise in people away from work, including those furloughed.”

Matthew Percival, CBI director of people and skills, said: “We can now clearly see the significant impact the virus is having on the labour market already. Over 600,000 people were taken off payroll between March and May, vacancies fell by the largest amount on record on the quarter, and hours worked fell at the fastest pace on record over the year.

“Unemployment falls unevenly across society and leaves scars that last generations. The urgent priority must be creating inclusive jobs today, by turbo charging the sustainable industries of tomorrow. This should be backed by a revolution in retraining, with business, government and education providers stepping up to reskill communities for the future.”

The ONS has also published latest employment and unemployment figures for the three months to the end of April, which was largely unchanged on the quarter. For the UK the jobless rate was 3.9% or 1.3 million.

For Wales it was 3% (47,000), Scotland 4.6% (127.000) and Northern Ireland 2.3% (20,000).

In England it was 3.9% (1.14 million)


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