UK Labour Market Data is Still Important

The headline unemployment figures in the UK has been hugely distorted through the pandemic so far. The data have already been distorted by two major factors and are soon to be distorted further by a third:

• There are a number of economically inactive people who have lost their jobs but don't technically count as unemployed.
• Furloughed employees still count as employed even though it is unclear whether employers have any intention of reemploying them longer term.
• The Job Retention Bonus scheme incentivises employers to cut hours and keep more staff rather than keep some staff full time and let the others go.

The MNI Markets team therefore believes the best single data set to assess the state of the labour market is aggregate hours worked. We look in depth at how the furlough and bonus schemes will distort the data further in the months ahead.

For the full analysis click the link below:

MNI_Analysis_Labour_20200804.pdf