MNI DATA IMPACT: UK Job Losses Continued Ahead Nov Lockdown

The UK jobs market continued to deteriorate through the autumn, ahead of the economic shutdown implemented in November that has yet to fully feed through to published data, a report published Tuesday by the Office for National Statistics showed.

Employment fell by 28,000 between October and November, according to PAYE data compiled by HMRC, leaving employment down by 819,000 since March and by 781,000 over the same period of last year. This RTI series is derived from average job losses over the calendar month.

This series has been subject to heavy revision; employment fell by a revised 8,000 in October — the smallest decline since February — compared to the originally-reported 33,000 drop.

Weakness in the labour market even before the announcement of the latest lockdown may provide for lively discussion at the Bank of England Monetary Policy Committee meeting tomorrow. The number of people claiming Universal Credit surged by 64,3000 in November, the biggest rise since July, reversing a 64,2000 decline in October (originally reported as a 29,800 decline). That takes the claimant rate to 7.4% from 7.2% in October. However, the series includes those claiming a range of benefits and may over-state the number applying for just Jobseekers Allowance. Claimant data were collected on 12 November.

The number of workers on furlough schemes soared to 15.5% of the total work force in the final two weeks of November, up from 9% in the second half of October. Employment, derived from the Labour Force Survey, declined by 144,000 in the August-October period, bettering expectations of a 250,000 decline, extending a 164,000 fall in the third quarter. That pushed the employment rate down to 75.2%, the lowest since the fourth quarter of 2017. The data underlying the LFS were collected over the 13 weeks ending in October and will not reflect the economic lockdown that began on 5 November.

The jobless rate for October jumped to 5.2%, according to experimental data, the highest level since March of 2016.

WAGES RISE

Wage growth soared, with lower-paid workers bearing the brunt of recent job losses. Average weekly earnings jumped to 2.7% in the three months to October from 1.4% in the second quarter, the biggest rise since the three months to February. The exclusion of lower-paid workers from the labour market accounted for 1-2.5 percentage points of the total rise in AWE, according to an ONS officials.

With inflation subdued, real earnings growth also surged. Price-adjusted regular earnings rose by 2.1% in the three months to October, the fastest pace since September of 2015, from 1.2% in the second quarter. Real regular earnings were negative as recently as the May-July period.

LFS employment has declined by 551,000 since the three months ending in February, bringing the unemployment rate up to 4.9%, the highest since the three months to July in 2016, although analysts expected a larger rise to 5.1%. Bank of England officials have suggested that the LFS official rate may understate the true level of joblessness in the country.

Redundancies rose by 217,000 in the three months to October to 370,000 and by 251,000 over the same period of 2019, both record-high increases in a series dating back to 1995. Employment in accommodation and food services has declined by 297,000 since February, or roughly one third of the total, according to the RTI data. Wholesale and retail jobs have fallen by 160,000 while manufacturing declined by 115,000. However, hours worked increased by a record high 12.8% to 29.5 per week from 26.2 in the three months to July.

- Vacancies rose by 110,000 between September and November over the three months ending in August, to 547,000, but remain 251,000 below the level of a year earlier. Self employed workers have continued to bear the brunt of the job losses, falling by another 183,000. However, statisticians believe that some self-employed workers may have reclassified themselves as employees since the pandemic wreaked havoc with the labour force. That takes the self-employment rate down to 13.8% from 15.3% at the end of 2019.