September 2020 labour market update

The latest labour market statistics indicate signs of an imminent downturn, with employment up marginally but unemployment also on the rise, particularly among young people. In many respects the latest data, which cover the three months to July 2020, are artificial in that employment is being temporarily bolstered by the Government's Coronavirus Job Retention Scheme.

While the figures for economic inactivity provide potential grounds for optimism, there are other signs of a significantly worsening picture ahead. Changes in the number of redundancies are the largest seen since the last recession in 2009. Overall redundancies remain at historically low levels, but 156,000 redundancies were made between May and July and the quarterly change resulted in the rate rising by 1.7 percentage points to 5.6%. Vacancies showed a rise in the latest provisional figures, for the period from June to August 2020, but the revised series used to calculate the number of unemployed per vacancy shows a fall of -267,000, indicating that in May to July there were 3.7 unemployed people for each vacancy.