It's become a recurring theme of this crisis that no one should believe government data because almost one of it is what it seems to be, and even less might be right. That is true of this morning's June unemployment data from the Office for National Statistics (ONS).
The headlines are this:
Early indicators for June 2020 suggest that the number of employees in the UK on payrolls is down around 650,000 compared with March 2020. The largest falls were seen at the start of the pandemic and while the number of payroll employees is still falling the decline is slowing. Flows analysis suggests that the falls in May and June are mainly because of fewer people moving into payrolled employment.
And this:
The Claimant Count fell slightly in June 2020 reaching 2.6 million; this includes both those working with low income or hours and those who are not working.
Plus this:
Vacancies in the UK in April to June 2020 are at the lowest level since the Vacancy Survey began in April to June 2001, at an estimated 333,000; this is 23% lower than the previous record low in April to June 2009.
What to say? First, that this is data for May and furlough was at its peak then. Of course unemployment had not risen by that much, even is 649,000 is still the biggest quarterly rise on record (records began in 1971).
And we know there have been many announcements of job losses since then.
Whilst I know from those looking for work that vacancies really don't exist unless you want to work in care of the NHS.
And remember, the claimant count is n to an unemployment figure.
So, the data does not present a true picture. The likely unemployment figure in May was around 2 million (pre-coronavirus unemployment plus this new figure). But that ignores 9.4 million furloughed people and more than 2 million self-employed people claiming support. Of course, we cannot know how many of them will become unemployed, but the Office for Budget Responsibility has assumed in its centre point forecasts that it is no more than 1.5 million, to create a total of 3.5 million. And my point is that is simply unrealistic: substantially more than 1.5 million are n to going to be returning to work when furlough and self-employed income support is over.
In that case this data tells us little, except that there is much worse to come.
And more worryingly, it would seem that preparation for that is not happening.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
I was listening to the radio this morning (R4) and did not buy any of it – all I could think of was ‘these are old figures – they are basically out of date’.
We could do with a UK version of shadowstats.com. They are currently showing USA unemployment at over 30%!
http://www.shadowstats.com/alternate_data/unemployment-charts
The OBR projects that 85% of furloughed workers will return to employment. That’s fantasy land stuff, and I think 50% will be far closer to the actual figure. Sunak can only ignore reality for so long, and he’s fast running out of road down which to kick the economic can.
You’re more pessimistic than me!
I think at least 3 million will nit return – about 1/3
Whichever of us turns out to be right, I don’t think any serious person, who is in a position to think freely on the matter (which excludes the political class), thinks a mere 15% of furloughed workers will find themselves unemployed when the scheme ends.
Also, as I have said previously, this is merely the fallout from wave 1 of the virus, and even assuming it vanishes, never to return, we still have our gift basket of Brexit misery to look forward to.
Indeed
Been trying to make sense of the labour market data for the past hour and a bit and it doesn’t make sense at all. Particularly the fact that the 650,000 fall on UK payrolls from the monthly real time data isn’t reflected in the three month Labour Force survey data for March-May. Of course some of that will be because the labour force data includes March. Some of this could be because perhaps a lot of the payroll loss occurred towards the end of April, but the labour force survey fieldwork was equally spread across the whole of April. But almost none of the monthly data is reflected in the labour force survey data from what I can see.
Danny Blanchflower, who knows a thing or too about labour data, described it as the worst labour data in a developed economy yesterday
I think he’s right
I work in the public sector so I am not directory affected by the sort of issues that many private sector business’s have in staying open/reopening. But I do have interesting conversations with those in the private sector abut the issues they face reopening.
The idea that in a few weeks it will be ‘business as usual’ coupled with the almost inevitable second wave AND Brexit at best dont look pretty & at worst apocalyptic.
None of this helped of course by a Government that cant even pretend to look competent.
All I can do is get my vegetable seed order in in the autumn