20 Apr Unemployment falls below 5% – but brutal cuts for the under 35s
NEMPLOYMENT has fallen below 5% in a surprisingly upbeat development that adds to hope that the economic bounce back from the pandemic can be swift and that fears of a jobless apocalypse are overdone.
Job vacancies are up 16%, while vaccine rollouts and the gradual end of lockdown are giving employers cause for optimism.
The black mark over the figures remains the jobs crisis among the young with job cuts in hospitality – pubs and restaurants – especially acute.
The ONS (Office for National Statistics) said unemployment was at 4.9% in the three months to February, down from 5% in January.
But in the year to March,811,000 jobs were lost in the UK, with under-35s accounting for a brutal 80% of those cuts. There are 1.67 million unemployed people in Britain, down 50,000 on the last quarter but up 311,000 on a year ago.
There are a further five million people still employed, but on furlough, a major headache for Chancellor Rishi Sunak.
Jack Kennedy, UK economist at job site Indeed, said:
“Two surprise falls in unemployment in a row, and Britain’s jobs market is beating all expectations – for now. But there’s every danger the improvement in the headline unemployment rate could be a false dawn. The number of people stepping out of the labour market entirely – to become economically inactive – is creeping steadily upwards, and the employment rate is sliding.
“While the impending end of the furlough scheme hangs like a spectre over the market, employers are steadily starting to hire again.”
The Resolution Foundation spoke today of a 6.2 million “Covid employment gap”, due to unemployment and furlough.
Nye Cominetti at the Resolution Foundation said:
“The UK labour market remained in a deep freeze in early 2021, though the sharp increase in vacancies in March ahead of retail and outdoor social activities reopening in April suggest it is starting to thaw at last.
“But the UK currently has a Covid employment gap of 6.2 million people who need to get back to work. This highlights the true scale of the labour market challenge ahead of us as economy reopens, that can be hidden by just looking at employment numbers.”
“Unless this gap is closed before the furlough scheme ends in September, we are likely to see a worrying rise in unemployment later this year – which will extinguish many people’s hopes of a post-Covid living standards recovery.”