Labour Market Statistics – December 2020
This briefing note sets out analysis of the Labour Market Statistics published this morning (15 December). They show that the labour market was starting to recover through September and October, and that the impacts of the second lockdown in November appear to have been fairly muted so far.
The headline story has been a further increase in redundancies, to 370 thousand between August and October, surpassing the record set last month. These rises continue to reflect the huge increase in redundancy notices over the summer, as firms restructured after the first lockdown. With redundancy notices now falling again, the headline redundancy figures will also start to fall back in the early part of next year.
On a quarterly measure – so comparing August-October with May-July – employment is down by 140 thousand and unemployment is up by 240 thousand. However underneath this, the single-month estimates of employment have been broadly unchanged for the last three months, with increases in unemployment being driven by more people who were previously ‘economic inactive’ starting to look for work as the economy showed signs of recovery.
Perhaps most strikingly, in the last three months we have seen significant falls in employment for men – down by 150 thousand – while employment for women has risen slightly, driven by a rise of over 160 thousand in the number of full-time employees. This may well reflect people increasing hours in response to their partner losing their job or income, as we have seen in previous crises; or women working in health and social care having to increase their hours in response to the impacts of the pandemic.
Looking at the snippets of data that we have from November, it does appear that the second lockdown may have led to a further weakening, but this is on nowhere near the scale that we saw in the spring. Flows out of PAYE employment in November were just over 100 thousand higher than they had been in the previous three months, but remained well below the levels seen in April. New claims to Universal Credit were around 50 thousand higher in November than in recent months (so nowhere near the million-plus monthly rises in the first lockdown) and the single-month vacancy figure fell back between October and November. On the other hand though, flows into PAYE employment also grew strongly in November, reaching pre-crisis levels for the first time.
Overall, today’s figures could have been significantly worse, but they also appear to be unlikely to get significantly better any time soon. This reiterates the need to do all that we can to support a jobs recovery in the new year – in particular by ensuring that we can get a trade deal with the EU and can do more to boost jobs growth, hiring and support for the unemployed.
New report: The impacts of the coronavirus crisis on the labour market
Separately, we also published yesterday more detailed analysis of the impacts of the crisis on the labour market, looking in particular at how the distribution of employment is changing and the implications for disadvantaged groups as the labour market starts to recover. Looking ahead the impacts of the second lockdown in November, a likely further lockdown likely in the new year, our absence to secure a trade deal with the EU and the winding up of the Job Retention Scheme all present significant risks and uncertainty for the early part of next year. So we believe that there are four key priorities for our labour market response as we head into 2021:
- A far greater focus on how we support those who are likely to be most disadvantaged in the labour market – in particular for ethnic minority groups, disabled people, those with long term health conditions, older people and women.
- To take more account of the impacts of the crisis on those in the lowest paid, least secure and lowest skilled work, and on those seeing their hours reduced – for example by introducing the previously announced Job Support Scheme and improving access to employment support for those in low paid work.
- More support those affected by the crisis to move into sectors and occupations that are growing, with a greater focus on retraining support and a greater targeting of this on those most at risk in the crisis.
- Measures to support new hiring in the new year, including measures to reduce hiring costs for employers and potentially hiring subsidies for taking on those who have previously been unemployed.
See more about the Institute for Employment Services.